The Audit Process, Planning, and Risk Analysis -Aduditing- Summer 2012(L7)- Prof. Helen Brown
Lecture 7: The Audit Process, Planning, and Risk Analysis by Professor Helen Brown The lecture begins with the Professor discussing the three main reasons for planning, which are described as (1) to obtain sufficient competent evidence, (2) to help keep audit costs reasonable, and (3) to avoid misunderstanding with the client. Planning an audit and designing an audit approach involves several steps, among which include understanding the client's business and industry, assessing the client's business risk, performing preliminary analytical procedures, gathering information to assess fraud risks, and understanding internal control and assessing control risk (there are more of them). Each step is also discussed in detail. Following that, two case problems are performed. The first (Flash Technologies) is discussed and after the discussion a risk analysis is performed for the company in the case. The second case discussed is the Pinnacle case ------QUICK NAVIGATION------ Three Main Reasons for Planning: 1:50 Planning an Audit and Designing an Audit Approach: 4:18 STEP 1: Initial Audit Planning Overview: 9:12 Initial Audit Planning (defined in-depth): 9:30 Identify Reasons for the Audit: 12:33 Obtaining an Understanding with the Client: 15:20 Develop an Overall Audit Strategy: 16:11 STEP 2: Understanding of the Client's Business and Industry: 18:43 STEP 3 - Assess Client Business Risk: 19:38 Flash Technologies Case Problem: 20:35 SILENCE (students discuss case among each other): 21:15 Relevant Professional Standards (PCAOB): 43:28 Discusses General Risks Identified in Flash Technologies Case (a risk analysis): 47:41 General Areas of Risk Displayed: 1:04:20 Financial Accounting / Reporting Risks: 1:12:08 Comparing Flash Technologies (the company) to its Respective Industry (ratios, profit): 1:14:25 Risk related to Business Strategies: 1:15:17 Positive Aspects of Flash Technologies: 1:16:34 Red Flags (indicators of negative aspects): 1:17:36 Financial Accounting & Reporting Risks (chart): 1:25:46 SILENCE (class break): 1:32:00 Performing Preliminary Analytical Procedures:1:37:38 Timing and Purposes of Analytical Procedures: 1:47:46 Five Types of Analytical Procedures: 1:53:39 Common Financial Ratios: 1:56:10 Pinnacle Manufacturing (Case Problem) Discussion: 1:56:55 Account Balances (for trend analysis): 1:59:06 Financial Ratios: 2:03:17 Financial Statement Analysis: 2:07:56 Potential Misstatements: 2:12:20 Further Financial Information (displays ratios such as Accounts Receivable turnover): 2:24:50 Analysis of Inventory Balance: 2:32:54 Analysis of Short-term and Long-term Debt: 2:35:08 Is Pinnacle like to fail or not? (discussion) : 2:36:22 Materiality: 2:42:05 Materiality Concept: 2:43:22 What is Materiality? 2:46:15 When is it Material? 2:47:11 To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Lecture 7: The Audit Process, Planning, and Risk Analysis by Professor Helen Brown The lecture begins with the Professor discussing the three main reasons for planning, which are described as (1) to obtain sufficient competent evidence, (2) to help keep audit costs reasonable, and (3) to avoid misunderstanding with the client. Planning an audit and designing an audit approach involves several steps, among which include understanding the client's business and industry, assessing the client's business risk, performing preliminary analytical procedures, gathering information to assess fraud risks, and understanding internal control and assessing control risk (there are more of them). Each step is also discussed in detail. Following that, two case problems are performed. The first (Flash Technologies) is discussed and after the discussion a risk analysis is performed for the company in the case. The second case discussed is the Pinnacle case ------QUICK NAVIGATION------ Three Main Reasons for Planning: 1:50 Planning an Audit and Designing an Audit Approach: 4:18 STEP 1: Initial Audit Planning Overview: 9:12 Initial Audit Planning (defined in-depth): 9:30 Identify Reasons for the Audit: 12:33 Obtaining an Understanding with the Client: 15:20 Develop an Overall Audit Strategy: 16:11 STEP 2: Understanding of the Client's Business and Industry: 18:43 STEP 3 - Assess Client Business Risk: 19:38 Flash Technologies Case Problem: 20:35 SILENCE (students discuss case among each other): 21:15 Relevant Professional Standards (PCAOB): 43:28 Discusses General Risks Identified in Flash Technologies Case (a risk analysis): 47:41 General Areas of Risk Displayed: 1:04:20 Financial Accounting / Reporting Risks: 1:12:08 Comparing Flash Technologies (the company) to its Respective Industry (ratios, profit): 1:14:25 Risk related to Business Strategies: 1:15:17 Positive Aspects of Flash Technologies: 1:16:34 Red Flags (indicators of negative aspects): 1:17:36 Financial Accounting & Reporting Risks (chart): 1:25:46 SILENCE (class break): 1:32:00 Performing Preliminary Analytical Procedures:1:37:38 Timing and Purposes of Analytical Procedures: 1:47:46 Five Types of Analytical Procedures: 1:53:39 Common Financial Ratios: 1:56:10 Pinnacle Manufacturing (Case Problem) Discussion: 1:56:55 Account Balances (for trend analysis): 1:59:06 Financial Ratios: 2:03:17 Financial Statement Analysis: 2:07:56 Potential Misstatements: 2:12:20 Further Financial Information (displays ratios such as Accounts Receivable turnover): 2:24:50 Analysis of Inventory Balance: 2:32:54 Analysis of Short-term and Long-term Debt: 2:35:08 Is Pinnacle like to fail or not? (discussion) : 2:36:22 Materiality: 2:42:05 Materiality Concept: 2:43:22 What is Materiality? 2:46:15 When is it Material? 2:47:11 To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html