Auditing Process

The auditor’s transaction-relate audit adjective follow and are close relate to management assertion. This is not surprising because the auditor primary responsibility is to determine whether management assertion about financial statement are justified. 

This transaction relate audit objective are intent to provide the framework to help the auditor accumulate sufficient appropriate evidence require by the third standard of field work and decide the proper evidence to accumulate for the class of transaction given the circumstance of the management. The objective remain the same from audit to audit, but the evidence varies, depending on the circumstances.
There are the different between general transaction relate audit adjective and specific transaction audit adjective for the each class of transaction. The six general transaction audit adjective discuss there are applicable to very class of transaction and are stat in the broad term. Specific transaction relate audit adjective are also applies to each class of transaction but are state in the term tailors to a specific transaction relate audit objective. There are be used to develop specific transaction relate audit objective for each class of transaction being audited.

- Occurrence report transaction exist this objective deal with the whether record transaction actually occurred. Inclusion of the sale journal when no sale occurred violate the occurrence objective. This objective is the auditor counterpart to management assertion of occurrence for class of transaction. The occurrence and completeness objective emphasize opposite audit.Occurrence deal with potential overstatement, completeness with unrecorded action.

- Accuracy-Record transaction are state at the correct amount the objective address accuracy of information accounting transaction and is one part of the accuracy assertion for class transaction, for sale transaction and objective violate if the quantity of the goods ship was different from the based quantity and wrong sell price was use for billing, extension or adding error occurred and wrong amount was include in the sale journal. It is important to distinguish between accuracy and occurrence or completeness, for example, if the record sale transaction should not have been recorded because the shipment was on consignment, the occurrence objective has been violate.

- Posting and Summarization: Record transaction are property include in the master file and are correctly summarization this objective deal with occurrence of the transfer of information from recode transaction in journal to subsidiary record and the general ledger. It is part of accuracy assertion for class of transaction.

- Classification: transaction include in the client journal are property classified this objective address whether transaction are include in the appropriate account, and is the auditor’s counterpart to management classified assertion of class of transaction.

- Timing: transaction are record on the correct date. The timing objective for transaction is the auditor’s counterpart to management cutoff assertion. A time error occurs if the transaction is not record on the day it took place. A sale transaction. After the general transaction relate audit objective are determine specific transaction relate audit objective for each material class of transaction can be develop.