In short
Because management override of controls is a risk in every audit, auditors test the appropriateness of journal entries and other adjustments, particularly those made at the end of the period.
Key takeaways
- Entries chosen for testing often involve unusual accounts, round numbers, users who don't normally post entries, or posting after the period is closed.
- The auditor also asks people involved in financial reporting about inappropriate or unusual entries.
- The other required responses are reviewing estimates for bias and evaluating significant unusual transactions.
Where it's tested
AUD: Fraud Risk — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which fraud-related presumption can NEVER be rebutted by the auditor?