Auditing siklus perolehan dan pengeluaran kas audit siklus

Auditing siklus perolehan dan pengeluaran kas, audit siklus Aset Tetap PERTEMUAN XII Dr Rilla Gantino, SE. , AK. , MM MM-FEB

KEMAMPUAN AKHIR YANG DIHARAPKAN Mahasiswa mampu menjelaskan dan menerapkan auditing siklus perolehan dan pengeluaran kas dan audit siklus aset tetap

Modern Auditing: Assurance Services and the Integrity of Financial Reporting, 8 th Edition William C. Boynton California Polytechnic State University at San Luis Obispo Raymond N. Johnson Portland State University Chapter 15 – Auditing the Expenditure Cycle

Chapter Overview

The Expenditure Cycle

Develop Audit Objectives

Understanding the Entity and Environment

Inherent Risk, Including the Risk of Fraud • Management Misstatement of Expenditures – Understate expenses – Understate payables • Other Misstatement Factors – High volume of transactions – Unauthorized purchases – Misappropriation – Duplication of payments

Analytical Procedures

Consideration of Internal Control Components • Control Environment • Risk Assessment • Information and Communication • Monitoring

Study Break 1. The expenditure cycle consists of all of the following activities, except: A. B. C. D. Purchase transactions Cash disbursement transactions Sales transactions Purchase adjustments C. Sales transactions

Study Break 2. This analytical procedure calculates the average number of days it takes to retire accounts payables. A. B. C. D. Current ratio Quick ratio Cost of Goods Sold to Accounts Payable Turn Days D. Accounts Payable Turn Days

Purchase Transactions – Documents and Records • Purchase requisition • Purchase order • Approved vendor master file • Open purchase order file • Receiving report • Receiving file • Vendor Invoice

Purchase Transactions – Common Documents and Records • Voucher • Exception reports • Voucher summary • Voucher register • Purchase transactions file • Accounts payable master file • Suspense files

Purchase Transactions – Functions and Control Activities • Initiating Purchases – Placing vendors on an authorized vendor list – Requisitioning goods and services – Preparing purchase orders • Receipt of Goods and Services – Receiving the goods – Storing goods received for inventory – Returning goods to vendor • Recording Liabilities

Systems Flowchart – Purchase Transaction

Systems Flowchart – Purchase Transaction

Systems Flowchart – Purchase Transaction

Study Break 3. This item is a written offer from the purchasing department to a vendor or supplier to purchase goods or services specified in the order. A. B. C. D. Purchase requisition Purchase order Receiving report Receiving file B. Purchase order

Study Break 4. This function of processing of purchase transaction includes placing vendors on an authorized vendor list and preparing purchase orders. A. B. C. D. Initiating purchases Receipt of goods and services Recording liabilities Paying liabilities A. Initiating purchases

Cash Disbursement Transactions– Common Documents and Records • Check Summary • Cash Disbursements Transaction File • Cash Disbursements Journal or Check Register

Cash Disbursement Transactions. Function and Control Activities • Computerized System – Paying the Liability – Recording the Disbursement • Manual System – Paying the Liability – Recording the Disbursement

Systems Flowchart – Cash Disbursement Transactions

Study Break 5. This record is a report of total checks issued in a batch or during a day. A. B. C. D. Check summary Cash disbursements transaction file Check register B. Check summary

Purchase Adjustment Transactions– Common Documents and Records • Purchase Return Authorization • Shipping Report • Debit Memo

Purchase Adjustment Function and Controls • Purchase Returns and Allowances • Other Controls • Tests of Controls

Substantive Tests of Accounts Payable Balances • Determining Detection Risk for Tests of Details – Existence and Occurrence – Completeness – Rights and Obligations – Valuation and Allocation – Presentation and Disclosure

Designing Substantive Tests • Initial Procedures • Analytical Procedures

Designing Substantive Tests • Tests of Details of Transactions – Vouch Recorded Payables to Supporting Documentation – Perform Cutoff Tests • Purchases cutoff tests • Cash disbursement cutoff tests • Purchase return cutoff tests – Perform Search for Unrecorded Payables • Subsequent payments

Designing Substantive Tests • Tests of Details of Balances – Accounts Payable Confirmations – Reconcile Unconfirmed Payables to Vendor Statements • Tests of Details of Disclosures

Study Break 6. This is a report prepared on the shipment of goods to vendors showing the kinds and quantities of goods shipped. A. B. C. D. Purchase Return Authorization Shipping Report Debit Memo Check Summary B. Shipping Report

Study Break 7. These items include all checks issued or vouchers paid after the balance sheet date. A. B. C. D. Purchase return cutoff tests Check summary Subsequent payments Confirmation of accounts payable C. Subsequent payments

Audit Field Standards: Audit of Fixed Assets Pertemuan 12

Learning Objectives n n n n n Understanding Audit Field Standards of Audit of Fixed Audit Understanding Internal Control of Fixed Assets Understanding Audit Objectives of Fixed Assets Being able to design Audit Procedures of Fixed Assets Understanding of Documents (evidence) to support the record of Fixed Assets Audit Evidence of Fixed Assets Physical Examination Report of Fixed Assets Some Frauds involving Fixed Assets Examples of Audit Findings of Fixed Assets

The Internal Control Objectives of Fixed Assets n n n Fixed Assets purchased is to support the company’s operation Fixed Assets are purchased with the best price Fixed Assets are guarded and maintained properly Depreciation expense is computed and allocated/recorded properly Fixed assets are valued fairly Fixed Assets disposed are them not used or not economical to be maintained.

Activities Need to be Examined Acquiring of Fixed Assets whether purchased or manufactured n Disposal of Fixed Assets (whether sale or trade-in or scraped) n Repair and Maintenance (revenue expenditure vs capital expenditure) n Depreciation and Allocation n Classification and Disclosure n

Audit Procedures of Fixed Assets are steps to be done sequentially to achieve the audit objectives of fixed assets.

Audit Objectives of Fixed Assets n n Transaction Audit Objectives v Occurrence v Completeness v Accuracy v Cut off v Classification Balance Audit Objectives v Existence v Completeness v Right and Obligation v Valuation and Allocation

Audit Objectives of Fixed Assets n Disclosure Objectives v Occurrence v Right and Obligation v Completeness v Classification and Understandability v Accuracy and Valuation (Boynton, Modern Auditing 8 edition)

Some of Documents (evidence) to support the record of Fixed Assets n n n n n Purchase Requisition Feasibility Study of Purchasing Fixed Assets Purchase for Quotation Bid Evaluation Purchase Order Contract/Agreement Document Progress Report or Receiving Report Written policies of fixed assets Ownership titles

Audit Evidence of Fixed Assets 1. 2. 3. 4. 5. 6. 7. Inquiries of the client Documentation Confirmation Observation Physical examination Analytical procedures Reperformance

Physical Examination Report of Fixed Assets n n n Getting the list of fixed assets at the date of physical examination Fixed assets’ ownership certificates Checking/computing the physics of fixed assets Preparing Physical Examination Report Tracing the physical examination results back to the balance sheet date Making adjustment entry and disclosure necessary

Some Frauds in Fixed Assets n n n n Over or under stating the value of fixed assets Not disclosing fixed assets placed for collateral Over or under estimating the economical life of fixed assets Under or over computing the depreciation Scrapping productive fixed assets Capitalizing revenue expenditures Not capitalizing capital expenditures Ownership title is not on the name of company’s

Examples of Audit Findings of Fixed Assets Assignment for students: Write an hypothetical audit finding of fixed assets ! n Condition n Criteria n Causes n Effects n Recommendation

Chapter 10: Auditing the Expenditure Cycle IT Auditing & Assurance, 2 e, Hall & Singleton

PURCHASES: BATCH PROCESSING n Step 1: Data processing department – inventory control q n Step 2: Data processing department – P. O. q n Receiving Department Step 3: Data processing department – batch update of inventory q n Purchasing Department Accounts Payable Step 4: Data processing department – validates vendors

CASH DISBURSEMENT: BATCH PROCESSING n n Step 5: Data processing department – scans for items due and prints checks for items received Step 6: Cash disbursements department – reconciles checks, submits checks to management for signature Step 7: Accounts payable – matches copies of checks with open vouchers, closes them and files documents Concludes expenditure cycle

CASH DISBURSEMENT: REENGINEERED—FULLY AUTOMATED Data processing steps performed automatically: n 1. 2. 3. 4. 5. 6. 7. Inventory file scanned for items and reorder points Purchase requisition record for all items needing replenishment Consolidate requisitions by vendor Retrieve vendor mailing information P. O. prepared and sent to vendor (EDI) Open P. O. record added for each transaction List of P. O. sent to purchasing department

CASH DISBURSEMENT: REENGINEERED– FULLY AUTOMATED n Goods arrive at receiving department n Quantities received entered per item

CASH DISBURSEMENT: REENGINEERED—FULLY AUTOMATED Data processing steps performed automatically: n 1. 2. 3. 4. 5. Quantities keyed matched to open P. O. record Receiving report file record added Update inventory subsidiary records G. L. inventory updated Record removed from open P. O. file and added to open A. P. file, due date established

CASH DISBURSEMENT: REENGINEERED—FULLY AUTOMATED n Each day, due date filed of A. P. are scanned for items where payment is due

CASH DISBURSEMENT: REENGINEERED—FULLY AUTOMATED Data processing steps performed automatically: n 1. 2. 3. 4. 5. Checks are printed, signed and distributed to mailroom (unless EDI/EFT) Payments are recorded in check register file Items paid are transferred from open A. P. to closed A. P. file G. L. - A. P. and cash accounts are updated Appropriate reports are transmitted to A. P. and cash disbursements departments for review

CASH DISBURSEMENT: REENGINEERED—FULLY AUTOMATED Control implications n q q General in nature Similar to those of Chapter 9

BATCH AUTOMATED SYSTEM VS. MANUAL BATCH n n n Improved inventory control Better cash management Less time lag Better purchasing time management Reduction of paper documents

REENGINEERED SYSTEM VS. BATCH AUTOMATED SYSTEM n Segregation of duties n Accounting records and access controls

PAYROLL PROCEDURES Drawbacks to using regular A. P. and cash disbursements systems to do payroll n q q q General expenditure procedures that apply to all vendors will not apply to employees Writing checks to employees requires special controls General expenditure procedures are designed to accommodate relatively smooth flow of transactions

REENGINEERED PAYROLL SYSTEM Often integrated with H. R. Differs from previous automate system n n q q q Operations departments transmit transactions to D. P. electronically Direct access to files are used for data storage Many processes are now performed in real time

REENGINEERED PAYROLL SYSTEM Personnel Cost accounting Timekeeping Data processing n n 1. 2. 3. 4. 5. 6. 7. Labor costs are distributed to accounts Online labor distribution summary Online payroll register Employee records are updated Payroll checks are prepared and signed Disbursement system generates check to fund the payroll imprest account G. L. updated

EXPENDITURE CYCLE AUDIT OBJECTIVES Input controls n q q q q Data validation controls Testing validation controls Batch controls Testing batch controls Purchases authorization controls Testing purchases authorization controls Employee authorization Testing employee authorization procedures

EXPENDITURE CYCLE AUDIT OBJECTIVES n q Process controls File update controls Sequence check control Liability validation control Valid vendor file Testing file update controls § § Access controls q Warehouse security Moving assets promptly when received Paying employees by check vs. cash Risks § § • • § Employees with access to A. P. subsidiary file Employees with access to attendance records Employees with access to both cash and A. P. records Employees with access to both inventory and inventory records Testing access controls

EXPENDITURE CYCLE AUDIT OBJECTIVES n q Process controls Physical controls Purchase system controls § Segregation of inventory control from warehouse Segregation of G. L. and A. P. from cash disbursements Supervision of receiving department • • • ü ü ü Payroll System controls § • • § Inspection of assets Theft of assets Reconciliation of supporting documents: P. O. , receiving report, supplier’s invoice Verification of timecards Supervision Paymaster Payroll imprest account Testing of physical controls

EXPENDITURE CYCLE AUDIT OBJECTIVES Process controls n Output controls q § § § § A. P. change report Transaction logs Transaction listing Logs of automatic transactions Unique transaction identifiers Error listing Testing output controls

EXPENDITURE CYCLE SUBSTANTIVE TESTS Risks and audit concerns Understanding data n n q q q Inventory file Purchase order line item file Receiving report file Disbursement voucher file File preparation procedures

EXPENDITURE CYCLE SUBSTANTIVE TESTS n Testing accuracy and completeness assertions n Review disbursement vouchers for unusual trends and exceptions q Accurate invoice prices Testing completeness, existence, rights and obligations assertions n q q Searching for unrecorded liabilities Searching for unauthorized disbursement vouchers Review of multiple checks to vendors Auditing payroll and related records

Additional Cybercrime Info n The following slides are not in the text!

Incident Response Mandates Gramm-Leach-Bliley Financial Institutions must … q Establish incident response capability q Perform prompt and reasonable investigation when sensitive customer info is accessed q Notify customers if misuse of info has or is likely to occur

Incident Response Requirements ISO 17799 n n ISO 17799 is international standard for IS best practices Security framework must contain an effective incident response approach In 2002, 22% companies with sales over $500 million had implemented ISO 17799 Must collect information for three purposes … q q q Internal problem analysis Use as evidence Negotiation for compensation from software/service vendors

Incident Response Requirements ISO 17799 n n n Response procedures should cover … Analysis and identification of cause of incident Planning and implementation of remedies Collection of audit trails and similar evidence Communication with those affected or involved with recovery Reporting the action to the appropriate authority

Best Practices n n n Imaging hard drive of employees who resign or are terminated (proactive) Avoid “patch and proceed” response Implement network forensics analysis with tools like En. Case Focus on insider threats Companies face increasing cyberliability claims stemming from security breaches

Chapter 10: Auditing the Expenditure Cycle IT Auditing & Assurance, 2 e, Hall & Singleton