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In this unit, you will be considering the auditing procedures for the following current asset items: cash  debtors  inventory  Emphasis will be placed on how to go about verifying these items as they appear in the balance sheet. 2.0 OBJECTIVES At the end of this unit, you should be able to: state the objectives of cash audit  outline the audit programme for cash  enumerate the general method of verifying debtors  state group inventory relative to financial reporting  list audit programmes for inventory.  MAIN CONTENT 3.1 Cash Cash is one of the most liquid assets and as such, it is susceptible to defalcation. This is why the audit procedures applied to cash should be more extensive. 3.1.1 Objectives of Cash Audit The auditor’s objectives in an audit of cash are as follows: to determine that the amount shown in the final accounts constitutes cash in hand, cash at banks, and cash in transit; to determine the reasonableness of th...

1.0 INTRODUCTION You may recall that in the last unit two major activities discussed in the final audit were vouching and verification. While vouching was seen as the process of examining documentary evidence necessary to support the recorded transactions which purportedly took place during the period under review, there is also the need for the verification of the assets and liabilities (and other items) appearing in the balance sheet at the end of the year. You are now very conversant with the objects of verification as highlighted in the last unit. In this unit and even in the next two units, you will be exposed to the procedures for auditing transactions with emphasis on verification of fixed assets, investments and liabilities bearing in mind that there are well established techniques for auditing transactions. 2.0 OBJECTIVES At the end of this unit, you should be able to: define fixed assets  state the objectives of verifying fixed assets  state the procedu...

1.0 INTRODUCTION In Module 1, Unit 1, you learnt about the “Overview of Auditing” where, the following topics were discussed. Purpose and advantages of audit;  Qualities of a good auditor.  In this unit, you are going to follow up the above topics by being exposed, to the topics listed below. Importance of the auditor in a business organisation;  Responsibilities of the auditor in relation to those of management;  Auditor’s independence relative to his relationship with interested groups.  OBJECTIVES At the end of this unit, you should be able to: discuss the importance of the auditor in a business organisation  outline the responsibilities of the auditor  explain the concept of auditor’s independence  describe important groups with which the auditor maintains  professional relationships  differentiate between the responsibilities of the auditor and those of management.  3.0 MAIN CONTENT 3...

1.0 INTRODUCTION Cooperatives today, play a prominent role in different economies, and although cooperation is a voluntary movement of the public at large, there has been considerable state participation in the development of cooperative movement in many countries. Mahatma Gandhi had envisaged that the cooperative movement is a tool for eradication of poverty when he said that: cooperation is a gateway to economic freedom.  Cooperative audit focuses on cooperative societies. In this unit, therefore, we shall consider the following :  what cooperative means;  types of cooperative governances and cooperatives;  features of cooperative audit;  objects of cooperative audit;  need for cooperative audit;  duties of a cooperative auditor.  OBJECTIVES At the end of this unit, you should be able to: explain the concept of cooperative  explain the types of cooperative governances and cooperatives  highlight the features and objects of coopera...

1.0 INTRODUCTION The law has relevance for auditors, especially, with regard to their rights, obligations and liabilities. In this unit, you shall be looking at the effects on auditors of the Companies and Allied Matters Act of 1990, the provisions in the Act establishing the relevant accountancy bodies (especially the Institute of Chartered Accountants of Nigeria), and the stipulations of other branches of the law by considering the following: appointment of auditors  remuneration of the auditors  resolutions as to appointment and removal of auditors  disqualification as auditors  auditors’ reports  rights of auditors  obligations of auditors  auditors’ liabilities.   OBJECTIVES At the end of this unit, you should be able to: explain the provisions of CAMA, 1990 regarding the  appointment and remuneration of auditors  explain the procedure in respect of resolution to appoint and remove auditors...

1.0 INTRODUCTION The Companies and Allied Matters Act (CAMA) of 1990 and the Fourth Standard of reporting provide that an auditor should report on the financial statements under examination to show if those statements present a true and fair view of the financial position of the firm. If the firm’s financial statements do not present a true and fair view, the auditor should qualify his reports. The Companies and Allied Matters Act of 1990 requires auditors to issue an opinion covering the following areas. The balance sheet of the company;   The profit and loss account;  The statement of sources and application of funds;   The holding companies (in the case of group accounts);  Other accounts as required by the Act such as: the disclosure of certain information relating to loans to directors and officers, directors’ emoluments, pensions, and compensation for loss of office.  The American Institute of Certifie...

1.0 INTRODUCTION In general terms, liabilities refer to obligations that result from past transactions to pay for assets or rendering of services. Liabilities can be classified into two major groups as follows:  Current liabilities – liabilities or debts that are payable within a short period of time, usually, within one year;  Long-term liabilities – liabilities that are payable within a long period of time, usually, more than one year. Auditing procedures relative to liability verification require attention. This unit will, therefore, consider the following topics:  (i) Balance sheet grouping of liabilities; (ii) Objectives of liability verification; (iii) Comparing what the auditor looks for in the verification of assets and liabilities; (iv) Audit programme for liabilities. 2.0 OBJECTIVES At the end of this unit, you should be able to: outline the classification of liabilities in the balance sheet state the objectives of liability verification...

1.0 INTRODUCTION Auditing is a process of examining and reviewing the accounting transactions in order to give assurance that the financial statements present the financial position of the firm fairly, as at a particular period. We can also refer to auditing as attestation to the true and fair view of financial statements of a business. The relevance of auditing in the business world of today needs no emphasis as the solution to the problem of credibility in reports and accounts lies in appointing an independent person, called an auditor, to examine and report on his findings. purpose of this unit is to give you an overview of auditing with emphasis on the meaning, nature and origin of audit, types, purpose and advantages of audit, distinction between accounting and auditing, as well as the development and growth of auditing in Nigeria. In addition, the qualities of a good auditor and the components of financial statements will be discussed. 2.0 OBJECTIVES At the end of this unit, you ...