KHAIRUDDIN HASYUDEEN & RAZI Chartered Accountants

1.0 INTRODUCTION 1.1 COMPANY BACKGROUND

KHAIRUDDIN HASYUDEEN & RAZI B-5-7 MEGAN AVENUE II 12 JALAN YAP KWAN SENG 50450 KUALA LUMPUR TELEPHONE: 03-2710-7717 FACSIMILE : 03-2710-7727

Khairuddin Hasyudeen & Razi is a chartered accountant firm that has been established its practice in since 1992. Khairuddin Hasyudeen & Razi (KHR) is a medium size audit firm in Malaysia and provides many services such as assurance, taxation and other services such as enterprise risk management and internal audit. There is about 20 to 30 staff that holds variety position that available in this firm. Khairuddin Hasyudeen Razis head office is located in Kuala Lumpur and has other three branches which located at Kota Bharu, Alor Star and Melaka. Those branches have been managed by certified partners.

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1.2

PARTNERSHIPS

Partnerships of Khairuddin Hasyudeen & Razi consist of certified partners which are:

Ahmad Khairuddin Mat Salleh Managing Partner khairuddin@khr.com.my Ahmad Khairuddin is accountancy graduate from University Kebangsaan Malaysia. Presently he is a member of the Malaysian Institute of Accountants (MIA) and CPA Australia.

Ahmad Razi Mohd Noor Partner razi@khr.com.my Ahmad Razi, a member of the Malaysia Institute of Accountants (MIA), CPA Australia and he is responsible for the operation and development of the firms practice in Alor Setar.

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Mohd Arif Haji Yusa Partner arif@khr.com.my Mohd Arif is responsible in managing our Melaka office operations and has experience in public practice since 1987. He holds an Advanced Diploma in Accountancy from ITM, is a member of the Malaysian Institute of Accountants (MIA) and CPA Australia.

Tengku Shahrizanny Tengku Abdullah Partner kusya@khr.com.my Tengku Shahrizanny is responsible for managing KHR office in Kota Bharu. He holds a Bachelor in Accountancy degree from UKM. He joined KHR upon graduation in 1994. In 1997 he was entrusted to manage the-then newly established Kota Bharu office.He is also a member of the Malaysian Institute of Accountants (MIA) and CPA Australia.

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Ahmad Shahrul Hj. Mohamed Partner shahrul@khr.com.my Shahrul is the partner in charge of the firms operations. A graduate from Universiti Utara Malaysia (UUM) with a degree in Accounting, he is a member of the Malaysian Institute of Certified Public Accountants (MICPA), Malaysian Institute of Accountants (MIA), Certified Information Systems Auditor (CISA) and Institute of Chartered Accountants in Australia.

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1.3

SERVICES Khairuddin Hasyudeen & Razi had provided much type of services from basic financial accounting, taxation, auditing, and other services.

1.3.1 ASSURANCE KHR is dedicated to provide assurance on financial reporting infrastructure and operations, helping to improve the standards of reporting and adapt to the regulatory requirements. Going beyond providing traditional assurance services, KHR business professionals adopts strategic and risk-based approach in assisting you to improve your performance, mitigating risks as well as enhancing your enterprise value.

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KHR facilitate to maximize value through:

FINANCIAL STATEMENTS AUDIT KHR Financial Statements Audit service provides assurance and attestation to the information regarding your financial performance in order to address the statutory requirements of corporate reporting and manage any existing or potential regulatory risks.

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FINANCIAL DUE DILIGENCE KHRs Financial Due Diligence Services provides you with an independent and professional perspective on the potential acquisition encompassing its strategic and financial aspects. FINANCIAL INVESTIGATION Through our Financial Investigation services, KHR are involved in obtaining, collating and analyzing information to help you make the best decisions on specific transactions or segments of your business. KHR assist you in investigating and evaluating financial discrepancies and improper business conducts to reduce the risk of fraud and disputes as well as providing independent and professional advice on handling these sensitive matters confidentially. FINANCIAL PROJECTIONS REVIEW For this purpose, KHR Financial Projections Review service conducts assessment on your financial projections, assisting you to plan your financial requirements strategically in a practical and realistic manner thus enabling you to accomplish your objectives OTHER SPECIAL PURPOSE ASSURANCE AND INVESTIGATION

ASSIGNMENTS In ensuring credibility and quality financial information, KHR Special Purpose Assurance and Investigation services are designed to assess and attest to the specific parts of the information to ensure its accuracy and in adherence to the requirements.

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1.3.2 TAX

1.3.3 OTHER SERVICES I. ENTERPRISE RISK MANAGEMENT

The risk management framework focuses on the enterprise wide risk identification, assessment and control measures that would assist clients to improve the organisations risk management approaching enabling their organisation to achive its corporate objectives. In addition to that, KHR provide recommendations for improving the risk management processes by encouraging risk awareness among the team members as well as enhancing the sharing of risk related information.Through the firms approach, it aims to enhance the enterprise and shareholder value through improved business performance by having better risk management.
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II.

INTERNAL AUDIT

There are several approaches that are used by the firm: o Setting up of the Internal Audit function within clients organization o Total outsourcing of the Internal Audit function o Assisting clients Internal Audit department through co-sourcing of the specific functions in the Internal Audit Department. o Independent assessment and quality review of your existing Internal Audit Department

1.4

CLIENTS

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1.5

VISION & MISSION OF THE COMPANY

 VISION

To be the preferred business advisor in enterprise value enhancement

 MISSION

Linking strategy to value

Khairuddin Hasyudeen & Razi (KHR) mission is Linking strategy to value. Basically, it focused on enterprise value. Enterprise value is enhancing through attainment of achievement of strategic goals. For instance, each strategic objective is accomplished; they will enhance the enterprise value.

KHR has enhance their enterprise value by emphasizing working together with client to increase the understanding of the organization and enabling in developing strategic plans and risk management in order to have proper strategic actions. Besides, by utilizing all resources like knowledge and experiences, human capital, KHR will try to address any solutions for their clients and delivers integrated business solution in order to achieve their clients corporate goals.

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1.6 ORGANIZATION CHART Ahmad Khairuddin Mat Salleh Ahmad Shahrul Mohamed Partner

Audit & Assurance Department Khairul Anuar Manager

Internal Business Services Norazlina Mohd Nor

Tax Department

Puan Siti Salwa Head

Lina Farhana Assistant Manager Zulfikri Senior 1 Nor Sobah

Juhara Md Ali Account Executive Wan Suziana Fazlica IT Officer

Sakina Assistant Manager Azira Tax Consultant 1

Senior 1

Mohd Faiz Senior 2

Fairuz Yasmin Senior 2

Osmalina Credit Control Officer

Nor Atikah Tax Consultant 2

Basri Senior 3 Wan M. Al Amin Senior 3

Afiq Ismail Senior 3 Syahril Ezeham Senior 3

Wandi Selamat Despatch Clerk

Nor Syaliza Senior 3 Nurul Hasna Associate Tasha Associate Afif Nabihah Associate Nawawi Associate 11 | P a g e Nur Fitrah Associate Abidah Associate Atikah Associate Norzarifah Associate

Rosidah Ahmad Cleaner Clerk

KHAIRUDDIN HASYUDEEN & RAZI Chartered Accountants

1.7

DAILY ACTIVITIES I am very pleasure can have a practical training at Khairuddin Hasydeen & Razi. I was placed at audit department. It is a good chance for me learns more about audit in the real working life. During the practical training, I learn so much of valuable knowledge in the audit field. All my daily tasks are relating about audit matters. I will do the audit work such as vouching documents, statutory audit, filing documents, preparation for confirmations letters, casting and call over audit report. Besides that, it is a great experience for me when Company sent me to outside audit. It is because I can perform audit duties in different culture of company. I very thanks to my audit manager to give me chance for handle audit case. This experience can let me learn the whole audit framework from beginning until sent out of draft account to clients. I will more understand about the audit procedures. From this, I also have a chance to communicate with clients for asking some questions. It can improve my communication skills. This practical training brings me a lot of benefit experience and good for my future career. So, in this report, I choose to do a topic or title that related to audit procedure. I will explain about accounting process and procedure in order to prepare the account for clients which involve many steps in accounting processes.

1.8 BACKGROUND OF STUDY In this report, I prefer to choose the topic of audit process because it is can provide detailed audit steps to be performed during the audit fieldwork that will achieve the specific audit objectives. In conjunction with the risk assessment, audit procedures will be developed by the auditor and approved by audit management prior to performance of the audit procedures. Besides that, as we known audits are an essential management tool to be used for verifying objective evidence of processes, to assess how successfully processes have been implemented, for judging the effectiveness of achieving any defined target levels, to provide evidence concerning reduction and elimination of problem areas.
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2.0

OBJECTIVE

2.1

OBJECTIVE OF THE STUDY 1. To know deeply about audit assurance and its purpose. 2. To expose in working field environment. 3. To understand the theory of audit planning 4. To get details of audit steps and the procedures (process of audit). 5. Understand the problems while preparing audit. 6. To give recommendations from the problems.

2.2

SCOPE OF THE STUDY Objective of this study is wanted to go thoroughly regarding the process of audit procedures. First of all, we need to known what are the purposes of audit, the steps and procedures to do the audit, then identify and understand the problems while preparing the audit. Also, give some recommendation or suggestion for the problems solution.

3.0

METHODOLOGY There is some method that used several methodologies in completing this report. Those methods are: 3.1 Primary data 3.1.1 Observing I made an observation on the audits works that has been done for different kind of client. During the practical training at Khairuddin Hasyudeen & Razi (KHR) I had a great experience and opportunity to know more about audit work and audit procedures. I will ask the opinion and solution from audit seniors when I faced problem for preparation of practical report. They give me advices or some

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information relating my topic chosen. Besides that, they explained me about audit procedures and some of problem that will meet during the audit process. 3.2 Secondary Data 3.2.1 Interview This information gets through interview session with the senior auditors to better understanding regarding the audit process for each types of business. They had a great experience in auditing and had much of information about auditing from their seminar training before. So that they really help me much in this study of topic I had chosen. 3.2.2 Internet Find the related information with the topic. All information can assist me in further understanding about the topic. I had browsed through internet to get additional information about topic I had chosen. For built up the strong base for my practical report. It is to help me for further detail about my topic. 3.2.3 Textbook Im using this method to get preliminary understanding regarding the all topic that related to audit process.

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4.0 DISCUSSION 4.1 DEFINITION OF AUDIT First of all, according to encyclopedia, the general definition of an audit is an evaluation of a person, organization, system, process. The term most commonly refers to audit in accounting; Audits are performed to ascertain the validity and reliability of information, also to provide an assessment of a systems internal control. The goal of an audit is to express an opinion on the person, organization, system and others Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements Auditing is a vital part of accounting. Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business .However, recent auditing has begun to include non-financial subject areas, such as safety, security, information systems performance, and environmental concerns. Besides that, according to companies Act, audit is primarily an opinion as to whether the profit and loss account and balance sheet show a true and fair view and comply with statute. In my opinion Audit is a quality improvement process that examination and verification of a company's financial and accounting records other relevant documents, and physical inspection of inventory by qualified accountants (called auditors). Or audit can be the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and establish criteria. Auditing should be done by competent and independent person.

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4.1.1 TYPES OF AUDIT In general, there have 3 types of audit, which are:  Operational audit

An operational audit evaluates the efficiency and effectiveness of any part of an organizations operating procedures and methods. At the completion of an operational audit, management normally expects recommendations for improving operations. For example, auditors might evaluate the efficiency and accuracy of processing payroll transaction in a newly computer system.  Compliance audit A compliance audit is conducted to determine whether the auditee is following specific procedures, rules or regulation set by some higher authority. Results of compliance audits are typically reported to someone within the organizational unit being audited rather than to a broad spectrum of users. For example, determine whether bank requirements for loan continuation have been met.  Financial Statement audit A financial statement audit is conducted to determine whether the overall financial statements are stated in accordance with specified criteria. Normally, the criteria are FRS; although it is also common to conduct audits of financial statement prepared using cash basis or some other basis of accounting appropriate for the organization. In determining whether financial statements are fairly stated in accordance with FRS, the auditor performs appropriate tests to determine whether the statement contains material errors or other misstatement.

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4.2

ADVANTAGES OF WORKING AUDIT FIELD The benefits of an audit are numerous. Audits can improve a companys efficiency and profitability by helping the management better understand their own working and financial systems. The management, as well as shareholders, suppliers and financers, is also assured that the risks in their organization are well-studied, and effective systems are in place to handle them. Fieldwork is the process of gathering evidence and analyzing and evaluating that evidence. The purpose of fieldwork is to accumulate sufficient, competent, relevant, and useful evidence to reach a conclusion concerning our performance expectations, and to support our audit comments and recommendations. Audit evidence is sufficient when it is factual and would convince an informed person to reach the same conclusion. Evidence is competent if it consistently produces the same outcomes. It is relevant when it is directly related to the audit comments, recommendations, and conclusions. Besides that, an audit can uncover inaccuracies and discrepancies within an organizations records, which may be indications of weak financial organization or even internal fraud, although fraud detection is not the main purpose of an audit. The benefits of an audit:
y y y y y

Analyze and understand companys financial records. Identify key areas for improvement in the company. Assess risks, economy, efficiency and quality. Uncover fraudulent or other illegal activities within the company. Reinforce and strengthen internal control.

Auditors have a unique broad perspective of a company which they apply to deliver effective analyses and relevant information. Management can use this information to evaluate the company and implement measures necessary to meet their objective.

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4.3 PLANNING OF AUDIT

Accept client and perform initial audit planning

Understand the clients business and Industry

Access client business risk

Perform preliminary analytical procedures Set materiality

Develop overall audit plan

Before want to start doing the audit, First of all must know the planning in audit. I. The auditor decides whether to accept a new client or continue serving and existing one. Decision must be making before incurring any significant cost that cannot recover. II. A thorough understanding of clients business and industry and the knowledge about the companys operation are essential for doing an adequate audit. III. Auditor uses knowledge gained from the strategic systems understanding of the clients business and industry to achieve its objectives. IV. Performance of analytical procedures during planning helps the auditor identify significant matters. V. Materiality is a concept or convention within auditing and accounting relating to the importance/significance of an amount, transaction, or discrepancy. VI. Perform the audit.

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4.4

FINDINGS 4.4.1 WORKFLOW IN KHR There is a lot audit procedures, it depend on the company. In KHR, the audit procedures based on section, which is starting from A section until N section. Proper planning of audits and reviews is essential to the effective conduct and completion of the work. This is an overview that KHR apply in the organization.

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This is some description about the model above: 4.4.2 Received full set of accounts. 4.4.3 Compare the accounts with the opening balance. Opening balance is taken from previous audit file. 4.4.4 Provide estimated audit fee by referring to client income statement and balance sheet for the related year. The estimated fees are set up by using the fee computation from Malaysian Institute of Accountants (MIA). 4.4.5 Casting checks the calculation in clients management account to make sure the truth of the figure and records. 4.4.6 Prepare the audit working paper for income statement and balance sheet. For the audit working paper, there are some indexes in order to do the audit working paper, the index was mentioned below: 1. Job Administration AA audit checklist completion AB audit checklist final AC audit checklist draft AD audit checklist current audit file (CAF) AE draft bills, estimated fees and time and claim record AF management letter AG notes for next year AH partner review
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AI outstanding matters AJ manager review AK working paper review AL financial statement review AM confirmation and others 2. Audit Planning BA audit planning memorandum BB audit planning program BC audit planning checklist BD analytical review BE audit risk BF related parties BG going concern and letter of support BH others

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3. Financial Reporting CA Opening Balance CB Audited Financial Statements CC Adjustment journal entry (AJE), reclassification journal entry (RJE) and client journal entry (CJE) CD Extended Balance Sheet and Income Statement CE Management Accounts CF Audited Financial Statement (Previous) CG Working Paper for Consolidation 4. Statutory Audit N Information about the directors, members, shareholders, manager, secretary, transfer of share, authorized capital and issued share capital fulfil the form 5. Balance Sheet items C Intangible Assets and Property, Plant and Equipment D Amount due from / to director or affiliated company E- Inventories and Work In Progress F Trade Receivables G Other Receivables, Deposit and Prepayments

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H Cash and bank balances J Trade Payables K Other Payables and Accruals L- Loans and Borrowings 6. Taxation M Tax computation done with manual, computation capital allowance done with schedules. 7. Income Statement B Revenue / Turnover B Cost of Sales B Gross Profit Margin B Other Operating Income B Distribution and Selling Expenses B Administrative Expenses B Other Operating Expenses B Finance Cost B Others

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4.4.7 Performing statutory audit at company secretary office (registered office). Statutory audit is a process of gathering the latest information about the directors, members, shareholders, manager, secretary, transfer of share, authorized capital and issued share capital. 4.4.8 Once the process of audit is finish, prepare the draft audit report and send it for typing. The draft audit that has been type will be reviewed by audit manager assigned for each assignment. 4.4.9 The draft audit report can be released after being reviewed by audit manager if there is no amendment. 4.4.10 Draft audit report is sent to client together with the signing pages for directors. The draft will be sent for review purposes and the signing pages should be returned back once being signed by the directors. 4.4.11 when the client agreed with the draft audit report and there is no amendment need to be done, the audit manager will continue to release the final audited report. 4.4.12 Administration department will prepare the auditors report that need to be signed by the partner of the audit firm. 4.4.13 After all the procedures are completed, final audit report can be released. Administration department will print out 7 copies of final audited report and compile it together with the signing pages and the auditors report. 2 copies are sent to clients, 2 copies for company secretary, 1 copy for tax department, 1 copy for Permanent Audit File (PAF) and Current Audit File (CAF).
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4.5

AUDIT PROCESS IN KHR In Khairuddin Hasyudeen & Razi (KHR), the first step in performing audit is audit engagement. An engagement letter defines the legal relationship between a professional firm and its clients. This letter stated the terms and conditions of the engagement, principally addressing the scope of the engagement. This audit engagement is appointment with client before the fieldwork is started. Basically, audit manager and partner will involve in the engagement to evaluate the client acceptance of first appointment and continuance. It same goes with theory that I have learnt in university. Besides that, in this engagement, auditor also can know the nature of business for the first appointment of client. Yet, evaluation of issues that have arise in previous year can be discusses for continuous client appointment. In engagement as well, they will talk about the audit fees, audit team involved and timing of audit engagement

When the fieldwork is started, first of all need to do Audit Planning Memorandum or called APM. The objective of APM is to obtain understanding of the company as well as guidance for auditor to do audit process. APM can help auditor to obtain understanding in clients environment as well as their internal control. Other than that, for recurring audit, we would try to understand the result of previous audit and would stress on the issues previous year. Thus, in APM, it divides in two parts which is comparison of the financial statement for the previous year with the financial statements for the year to be audited. It is called preliminary analytical procedures. Then, each variance or difference will come out with our audit procedure which is related to nature, extent and timing. Next is to evaluate the business risk and doing planning materiality. In this part, it is as a guidance to assess risk of material misstatement in the financial statement. Basically, in theory APM was covered three processes in audit process which is obtaining understanding of entity and establish material and risk and set overall audit strategies and audit plan. The example of APM can be referring in appendix 1.

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In audit business process, in KHR, it will divide into two parts which is Profit and Loss part and Balance Sheet Part. Basically, after doing Audit Planning Memorandum (APM), next step is to check opening balances of balance sheet items. This can be done by check whether the amount reflected in previous audit report same as the opening amount in clients account. If there is any difference, note of that amount and make adjustment of the amount. The next step is to check journals whether have been posted to correct nominal ledger account or not. Scrutinize nominal ledger journals made during the period for evidence of any unusual journal entries. For such items, obtain satisfactory explanations from the client. Then obtain a closing trial balance for the current period. Check that the trial balance is mathematically accurate and trace numbers to the draft financial statements and lead schedules. For agreed post trial balance audit adjustments, check that the client has processed agreed journals into the nominal ledger and financial statements properly After all audit process is complete (including balance sheets and income statements items) next is auditor need to do the Summary Review Memorandum (SRM). (Appendix 9) SRM is the summary of audit evidence that auditor get from the audit process. Basically, auditor will make analytical procedures the audited financial statement for current year that need to be audited and audited financial statement for previous year. Thus, auditor will summarized why the variance is arise regarding to audit evidence. Besides that, SRM is a tool to know which kind of audited report need to be issued whether unqualified, qualified, adverse, and disclaimer report. After fieldwork is done, then client need to fill the form related to their independence. Basically, in this stage, auditor must evaluate the results of audit procedures which are concerned on sufficiency of the audit evidence and overall effect of detected misstatements on the financial statements. In this stage, auditor consider on the effects of unadjusted material misstatements on assets, liabilities, equity, revenues, and expenses. In other words, concentrate on the effects on the financial statements. After all is done, then the work will be reviewed by senior in charged or leader of the team. After senior is satisfied, it will be reviewed by manager. The manager will always follow up the any
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unresolved issues or give some point need to be cleared. After satisfied, then it will be reviewed by engagement partner as a final check to ensure that sufficient appropriate audit evidence has been obtained to support the conclusions and the audit opinion. In this stage auditors and managers in charged and engagement partner need to fill the checklist related to independence and professional code of ethic. After all, the report will be issued and send to client.

4.6 WORKING PAPERS

4.6.1 Section B- Income Statement items Section/ Profit And Loss Account.

B section, which is include Income Statement, Analytical review for Income Statement, Details of Balance Sheets, Ninth Schedule, test of control (TOC) for sales and purchase cycle, treasury and payroll. But actually it is depending on the company, if the company is big and has a lot of transaction, it needs TOC cycle, but if the company is dormant (company with small transaction) company only, hence no need to do TOC cycle. Same goes to Completeness and cut-off, if TOC done, hence the completeness and cut-off must be done together. The purpose of this, just to make sure all the transaction is correctly and accurately recorded. First of all, for this section, there are few items that compulsory to perform an audit. This is due to the tax computation. By doing this, detailed information on taxable items easily can be obtained from this schedule. This schedule actually represents an operating costs which incurred by the business. Generally, for all expenses, obtain an analysis of operating costs showing accounts included in the cost headings disclosed in the financial statements. Test the mathematical accuracy and agree balances to the nominal ledger. Obtain an analysis of employee costs analyzed by payroll cost, tax and pension contributions. Test the mathematical accuracy and agree balances to the nominal ledger. Obtain or prepare a monthly schedule of cost of sales and gross profit percentage analyzed by department, location, segment or product.

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Compare with prior periods. Explain significant or unexpected changes and trends. Be vigilant in particular for evidence of unrecorded purchases or overstated stock or sales. The example of B section can be refer in Appendix 2

4.6.2 Sales Firstly, obtain an analysis of sales by location and product. Check the casts and ensure it agrees to the nominal ledger. Besides, obtain a schedule of monthly, quarterly or annual sales, value and quantities if available, analyzed by geographical area, market and major product or major contracts and compare with prior periods. Review the schedule taking into account business and consumer trends, product mix, technology, new products, discontinued products, expansion etc. Besides that, compare miscellaneous and cash sales by product and location with prior periods and at the same time, investigate any significant differences. Calculate the percentage credit notes by value and quantity with sales and compare with prior periods. Scan sales accounts in nominal ledger for evidence of unusual entries. Examine supporting documentation in respect of unusual items detected. For a selected month, check that the total number of sales invoices and dispatch notes issued and properly reconciled. Test that a sample of dispatch notes have been properly invoiced by checking to invoice details such as customer, quantity and price and customer order. To check the validity of credit notes issued in the period can be by vouching credit notes recorded in sales to the credit note or examining valid supporting documentation or inspecting evidence of authorization.

4.6.3 Cost of Sales For cost of sales, compare analyses of distribution costs and administrative expenses with prior periods. Prepare a predictive estimate or proof in total of payroll costs of gross pay by obtaining prior period payroll costs, the numbers of employees in the period year including starters and leavers from Personnel Department and considering the effect o pay rises and changes in the staff mix in the period.

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For sample of employees include on the payroll master, check that the gross pay agrees to a contract of employment or subsequent authorized amendments to pay rates. Compare with recorded payroll costs. Ensure description of employee as either full time or part time is accurate. Compare purchases by month with prior period. Explanation needed from the client the reason for significant or unexpected changes and trends. For discounts allowed, calculate as a percentage of sales and compare with prior periods, company policy and credit control trends. For all operation categories, scan the nominal ledger accounts, journals or transaction files and list major transactions which normally those in excess of adjusted materiality limit and unusual transactions which those that indicate an accounting or disclosure matter. Examine documentary evidence underlying identified major and unusual transactions to ascertain that underlying evidence supports the recorded amount and description of the transaction. Ensure that revenue transactions are recorded in the proper period properly classified and recorded in accordance with accepted accounting principles and the client's revenue recognition policy and cost of sales transactions are recorded in the proper period and properly classified as well. Besides, ensure other transactions are recorded in the proper period and in a manner that properly matches revenue and expenses. Test a sample of purchases recorded in the nominal ledger in the period and inspect authorized invoice by checking the accounts classification and ensure that agree to other evidence of work done.

4.6.4 Section C Property, Plant and Equipment

There are few procedures to be followed during the audit work for this section. Firstly, obtain a summary schedule of each significant class of property, plant and equipment to satisfy disclosure requirements, showing opening balances, additions, disposals, revaluations and closing balances. Ensure that the property, plant and equipment exist and are genuine assets of the business and are beneficially owned by the business and any restrictions, pledges or liens on the property, plant and equipment are identified and adequately disclosed in the financial statements.
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At the same time, this fixed assets schedule need to be prepared as to attachment for this section. Test the mathematical accuracy, agree opening balances to prior period working papers and agree closing balances to the nominal ledger and investment ledger where maintained. Vouch against invoices, contract notes, and agreements for any additions or disposals. Confirmation of documents needed from the client. Ensure that all property, plant and equipment are included in the balance sheet, income from investments is complete and gains or losses on realization of property, plant and equipment are correctly stated. In additions, ensure the property, plant and equipment are properly disclosed and capitalized. Ensure that property, plant and equipment are accurately stated at cost or revalued amounts and provided against where necessary. In KHR, normally do not conduct physical verification of the assets to ensure its existence. It is only applicable to a very large amount of assets. Then, check calculation of the rates of depreciation to ensure that the rates used are reasonable and consistent with previous years. If the assets are charged, ensure that the particular charge is contained in the register of charges and relevant forms are filed. Where possible, obtain a copy of the relevant forms. The example of plant, property and equipment (PPE) can be referring to Appendix 3.

4.6.5 Section D Amount due/to affiliated/associated company

Disclosure of inter-company balances and transactions is required in respect of the Company and related corporations, for an example, between the Company and other companies within the same group as well as companies or firms in which the directors have interest. Inter-company balances include those arising in the ordinary course of business or from loans and advances or payments made on behalf of each other. For this section, obtain an analysis of amounts due to and due from group, joint venture and associated undertakings, analyzed by type between amounts due within one year and those due after one year, including movements in the year where necessary. Check the casts and agree balances to the nominal ledger. Then compare balances due
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from group, joint venture and associated undertakings with prior periods and explain significant change as well as taking group payment policies into account. Lastly, obtain a confirmation letter from the related party of the balance due and any repayment and interest terms. The example of confirmation can refer to Appendix 4

4.6.6 Section E Inventories and Work In Progress

For this section, first of all obtain stock list and vouch as follows: a) Test additions and extensions. b) Check pricing with latest purchase invoices and compare with previous year. c) Check to the company's stock records

The next step is to ensure the valuations of stocks shown are at the lower of cost or net realizable value or other accepted Accounting Standard. After that, obtain stock certificates signed by the directors confirming the total stock and the location of the stock. Ensure that closing stocks do not include stock owned by third parties held by the company on their behalf. Besides that, check for stock located or held by third parties which belongs to the company is taken up properly. If stock take was carried out at yearend, ensure that stocks shown in the balance sheet reconcile to the inventory records taken at the stock take.

4.6.7 Section F - Trade Receivables/ Trade debtors

For this section, balances must be traced to schedule of debtors, cast schedule to agree with control account, balance sheet and debtors ledger. Scrutinize schedule of subsidiary or associates or related companies accounts and non-trade items which should be shown separately. 1. Test check selected accounts as follows: a) Check casting. b) Enquire into large credit balances.
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c) Scrutinize for unusual entries. Then, review long outstanding accounts with management as to its collectability and the necessity to provide for bad and doubtful debts. Check subsequent receipts. Scrutinizes all accounts not supported by subsequent receipts and note or list debts outstanding for over one year. Seek explanation from the client as to the delay in payments. Besides that, obtain direct confirmation of balances especially large balances where possible. Lastly, must sent confirmations to client then the client sent to third parties. This is because to make sure balance as per book client same with the balance in third parties book. The example of confirmation can refer to Appendix 6.

4.6.8 Section G Sundry Receivables, deposit and prepayment.

The first procedure for this section is to obtain a listing of other receivables, deposit and prepayments. First things, is analyzed by category and between amounts due within one year and those due after one year. Test the mathematical accuracy and agree or reconcile balances to the nominal ledger. Then, compare an analysis of other receivables, deposit and prepayments with prior periods. Explanation needed for any significant or unexpected changes. In addition, review related income and expense accounts for evidence of omission of significant prepayments. Obtain confirmation of significant advances, for an example, staff loans and inquire into the reason for such advances. Other than that, here, can obtain direct confirmation from all entities, this is applicable only for large amounts, with which the entity has loans or notes receivable at the balance sheet date. This can be done by preparing a confirmation requests from the respective parties. Ensure loan and notes receivable balances reflect a proper cut off of receipts and disbursements. Obtain an analysis of any loans and notes receivable written off by determine that significant write-offs have been properly authorized, for an example, in Board minutes. Review the propriety of recoveries if there is any. Other than that, check translation of any foreign currency loans and notes receivable balances and cash movements and treatment of exchange differences. Besides hat, review document and
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then test the process used by management to determine any allowance or provision for irrecoverable loans and notes payable. Review subsequent events or transactions for any indications of required adjustments to the allowance or provision for irrecoverable loans and notes payable for the old and unusual outstanding balances with the client. Review subsequent cash receipts for evidence of significant collection problems and assess percentage of period end debts collected by the date of audit fieldwork. For significant other receivables, perform vouching to supporting documentation and consider recoverability and if there is no movement between a year, the company needs to provide a provision. Besides that, test the calculation of material prepayments and vouch to supporting invoices and other documentation. The example for this section can be referring to Appendix 7.

4.6.9 Section H Cash and Cash Equivalents.

Procedures that to be followed for this section is, firstly obtain a schedule of all cash and bank accounts open at the balance sheet date or existing during the period showing the account number and balance per the nominal ledger. Check the casts and agree balances to the nominal ledger. Compare the list of cash and bank balances with prior periods and budgets. Ensure cash balances as presented in the balance sheet, properly reflect all cash and cash items on hand, in transit or on deposit with third parties. Compare total petty cash payments with prior periods and on a monthly basis. In addition, obtain an analysis of interest received and paid in respect of bank deposits and bank overdrafts. Obtain direct confirmation of period end balances from all banks with whom the entity conducted business during the year by the use of bank confirmation letter. Besides that, ensure cash balances reflect a proper cut-off of receipts and payments. This can be done by reviewing review receipts and payments in the cash book for 5 items either side of the balance sheet date and check the validity and timing of material items and trace transfers between bank accounts, including related parties for a selected period either side of the balance sheet date and determine that transfers are properly recorded in the correct period.
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If control over cash is weak: obtain returned cheques in respect of any unusual payments identified and examine details of payees and amounts recorded in the cash payments book and check propriety and review or prepare a proof of cash reconciliation and corroborate the totals of receipts and payments recorded in the selected period. The next step is to obtain a copy of the bank reconciliation for each account at the balance sheet date and ensure it agrees the bank balance figure to the bank statement and bank confirmation letter. Then trace deposits in transit and uncleared cheques to after date bank statements and reconcile the balance with the nominal ledger. Examine documents supporting significant uncleared deposits and outstanding cheque payments which are not cleared at the audit date for cut-off. Scan the cash and bank nominal ledger accounts for evidence of unusual or reconciling entries. Explanations needed for such items from the client.

4.6.10 Section J Trade Payables

For this section, trace balances to schedule of creditors, cast schedule to agree with control account, balance sheet and creditors ledger. Scrutinize schedule of directors' accounts, subsidiary, associates or related companies accounts and non-trade items which should be shown separately. Verify balances with creditors' statements. Where no statements are available, select material balances for circularization, vouch with purchase invoices and check for subsequent payments after year-end. Besides, verify large balances, especially on the nature of such balances and on how they arise. Conduct a search for unrecorded liabilities after year-end and ensure that such liabilities pertaining to the year under review are taken up in the accounts as accruals. Obtain direct confirmation of balances, especially large balances where possible. Liabilities need to be segregated into short-term and long-term, where amount due within 12 months fall under short-term liability meanwhile amount due after 12 months fall under long-term liability. The example of confirmation trade payables can refer to Appendix 8.

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4.6.11 Section K Sundry Payables and Accruals

Obtain a lead schedule supporting required disclosures for other creditors and accruals and deferred income. Test the mathematical accuracy, agree comparatives to prior period working papers and agree or reconcile closing balances to nominal ledger. Compare an analysis of other creditors, accruals and deferred income with prior periods. Compare related income and expense accounts with prior periods. Explanation needed for any significant or unexpected changes and consider any evidence of omitted accruals or deferred income. Besides, obtain a list of bills of exchange outstanding at the year end. Test the mathematical accuracy and agree to the lead schedule. Agree details of bills to the clients bills register and check that bills were subsequently met on the due date. Review the summary of other creditors. Test the calculation of significant other creditors and vouch to relevant supporting documentation. Besides, review the pension contributions control account in the nominal ledger and ascertain if payments to the pension scheme were properly made on a timely basis in respect of employees and employers contributions. Review an analysis of accruals including interest separately and deferred income. Test the calculation of material accruals and vouch to relevant supporting documentation. For test pension costs accruals, enquire into pension scheme position and ascertain how and when accrual will be eliminated. In addition, review the effect of changes to benefits in the year. Sometimes we need to discuss with management the method for establishing the completeness of accruals and estimating the accrual needed. Develop an independent expectation of accruals and consider reasonableness in comparison with amount recorded. For accrued payroll costs, ensure that it agrees the calculation and subsequent payment of accrued salaries and wages and check the calculations of holiday pay and ensure that the accrual is adequate. For deferred income, obtain an analysis of all items included in the period end balance and of movements in the period. Check the validity of deferred income and vouch to relevant supporting documentation. Besides, check that the

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amount of deferred income released to the profit and loss account is properly calculated based on a consistent basis with prior periods and the related asset.

4.6.12 Section L Loan and borrowings

There are few procedures to be followed in preparing Schedule L. First of all, obtain an analysis of loans and finance lease obligations due within one year and due after more than one year including the issue date, maturity date, face value, interest rate or terms, opening amounts, increases in loans and finance lease obligations, repayments, unamortized and amortized discounts and closing balances. Test the mathematical accuracy and agree or reconcile balances to the nominal ledger. In addition, obtain an analysis of interest payable on finance lease obligations, bank loans and overdrafts and other loans. Ensure the balances agree to the nominal ledger. Compare debt balances such as loans and finance leases with prior periods and budgets. Consider the interest amortization of debt issued at a discount or redeemable at a premium. Calculate interest expense as a percentage of average debt for evidence of unrecorded liabilities. Other than that, ensure that all relevant terms and details of loans are known including name of lender, original issue date, proceeds received means the net of eligible issue costs, security, interest rates applying and repayment terms. Update permanent file with relevant information for material new loans and finance lease agreements which includes finance costs profile as necessary. Request confirmation of balances payable from lenders with whom there was a significant loan outstanding at the balance sheet date or at any time during the period. Include in confirmation request, details of accrued interest, security and repayment terms. For repayments of loans, vouch that repayments are in accordance with loan agreements and vouch to approve documentation. Meanwhile, for loan drawdown in the period, have to check authorization to minutes or other documentation and vouch to cash received records and bank statements as well. Ensure it agrees details to loan agreements. Vouch issue costs to invoices and other supporting documentation.

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For the debt was issued with net proceeds less than the repayable amount, check that the interest amortization of the discount or premium is on an acceptable basis and has been accurately calculated and the balance sheet/net asset statement liability correspondingly increased. Ascertain from management or trustees details of any covenants included in bank loans or other debt agreements need to test compliance with debt covenants by agreeing covenant details to loan agreements or permanent file. Discuss with management what remedial action has been taken to deal with any non compliance and if necessary ask the client to obtain a waiver from the lender in respect of any non compliance which could accelerate debt repayment. To perform test on interest payable on loans by vouching interest payable to supporting documentation and recalculating interest accrued. For lease agreements, inspect for new finance leases incepting in the period, check suitable authorization and confirm finance lease classification. Check that a proper allocation of interest deferred to future periods has been made that the amount capitalized is correct. For repayments of finance lease obligations, check that rental payments are in accordance with the lease agreements and that payments have been properly split between repayments of capital and interest.

4.6.13 Statutory Audit- N Section For this section, any important changes need to be noted. If the is any acquisition of assets during the financial year, resolution regarding that matter need to be photocopied. For an example change of bank signatories to current bank account, transfer of securities, directors remuneration, all the resolution regarding this matter need to be photocopied. Besides, form of annual return as well as all the related form such as Form 49 also has to be photocopied for reference. Three books that need to be referred are minute book, secretarial book and register book. Firstly, go through the minute book. While extract the information, browse through the minute content. Secondly, obtain all the latest dated forms from secretarial book. Finally, reference made on register book to fill statutory programme.

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4.6.14 Dormant Company For dormant company, most of the schedules are not applicable. The procedures for this type of company is confirm that the company has indeed been dormant. Then ensure that unresolved items brought forward from previous year have been cleared. Besides, obtain photocopies or extract of minutes of AGM, directors meetings and EGMs if any. Ensure the trial balance agree to general ledger. Ensure the opening balances of general ledger agree to previous years financial statements. In addition, for share capital and statutory records, ensure that authorized share capital agree to Memorandum of Association. Vouch movements in issued capital, if any and obtain copy of returns on allotment. Finally sight statutory records, complete the statutory registers checklist.

4.6.15 Audit Report The final stage in the auditing process is preparing the audit report, which is the communication of the auditors findings to users. Audit journal entries have to be prepared if the is any adjustments in accounts. After all this documents have been prepared, the audit file will be given to the manager for review. The review notes given by the manager after he reviewed have to be cleared. After cleared all his review notes, the documentation can be prepared. The documentation that needed to be prepared is:

y y y y

Note of fees Draft audited accounts Two copies of audit journal entries Twelve copies of the Directors Report, Directors Statement and Statutory Declaration

y y y y y y
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Register Form 7 Letter of representative Stock certificate Cash in hand certificate Certificate of directors remuneration and shareholdings Bank confirmation

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y y

Confirmation of balance Cover sheets, Tax cover letter, Form C and Form R It is important to note that auditor's reports on financial statements are neither

evaluations nor any other similar determination used to evaluate entities in order to make a decision. The report is only an opinion on whether the information presented is correct and free from material misstatements, whereas all other determinations are left for the user to decide. There are four common types of auditors reports, each one presenting a different situation encountered during the auditors work. The four reports are as follows:  Unqualified Opinion An opinion is said to be unqualified when the Auditor concludes that the Financial Statements give a true and fair view in accordance with the financial reporting framework used for the preparation and presentation of the Financial Statements. An Auditor gives a clean opinion of Unqualified Opinion when he does not have any significant reservation in respect of matters contained in the Financial Statements An Unqualified Opinion indicates the following: (1) The Financial Statements have been prepared using the Generally Accepted Accounting Principles which have been consistently applied; (2) The Financial Statements comply with relevant statutory requirements and regulations; (3) There is adequate disclosure of all material matters relevant to the proper presentation of the financial information subject to statutory requirements, where applicable; (4) Any changes in the accounting principles or in the method of their application and the effects thereof have been properly determined and disclosed in the Financial Statements.

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 Qualified Report A Qualified Opinion report is issued when the auditor encountered one of two types of situations which do not comply with generally accepted accounting principles, however the rest of the financial statements are fairly presented. This type of opinion is very similar to an unqualified or clean opinion, but the report states that the financial statements are fairly presented with a certain exception which is otherwise misstated. The two types of situations which would cause an auditor to issue this opinion over the unqualified opinion are: I. Single deviation from GAAP this type of qualification occurs when one or more areas of the financial statements do not conform with GAAP (e.g. are misstated), but do not affect the rest of the financial statements from being fairly presented when taken as a whole. Examples of this include a company dedicated to a retail business that did not correctly calculate the depreciation expense of its building. Even if this expense is considered material, since the rest of the financial statements do conform with GAAP, then the auditor qualifies the opinion by describing the depreciation misstatement in the report and continues to issue a clean opinion on the rest of the financial statements. II. Limitation of scope - this type of qualification occurs when the auditor could not audit one or more areas of the financial statements, and although they could not be verified, the rest of the financial statements were audited and they conform GAAP. Examples of this include an auditor not being able to observe and test a companys inventory of goods. If the auditor audited the rest of the financial statements and is reasonably sure that they conform with GAAP, then the auditor simply states that the financial statements are fairly presented, with the exception of the inventory which could not be audited.

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 Adverse Opinion report An Adverse Opinion is issued when the auditor determines that the financial statements of an auditee are materially misstated and, when considered as a whole, do not conform with GAAP. It is considered the opposite of an unqualified or clean opinion, essentially stating that the information contained is materially incorrect, unreliable, and inaccurate in order to assess the auditees financial position and results of operations  Disclaimer Opinion A Disclaimer of Opinion, commonly referred to simply as a Disclaimer, is issued when the auditor could not form, and consequently refuses to present, an
opinion on the financial statements. This type of report is issued when the auditor tried to audit an entity but could not complete the work due to various reasons and does not issue an opinion.

These are situations which Statements on Auditing Standards (SAS) would cause an auditor to issue a disclaimer of opinion:   A lack of independence, or material conflict(s) of interest, exist between the auditor and the auditee (SAS No. 26) There are significant scope limitations, whether intentional or not, which hinder the auditors work in obtaining evidence and performing procedures (SAS No. 58);   There is a substantial doubt about the auditees ability to continue as a going concern or, in other words, continue operating (SAS No. 59) There are significant uncertainties within the auditee (SAS No. 79).

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4.7

PROBLEMS WHILE PREPARING AUDIT Firstly, the problem when doing audit in KHR is client does not give the details in the certain significant account. So, it is hard for me to state the details in the audit working papers and to gather the evidence of documentation. Secondly, the documentation such as, payment vouchers and invoices, purchase order not separated, supposedly should be separated by month and correctly rearrange the document. This is because to ensure that all of the records are fairly stated and all supporting document needed are arrange in order. Thirdly is about, sometimes they figured cannot found out for example the amount of plant, property and equipment is RM 2,000, 000 but after recalculated the Fixed Asset registered is not tally. So, the common reason is because they is a new person in charge, the person in charged was resign and the others reason is this amount just brought forward from previous year. After discussion with the audit senior, I decided to issue the qualified report for the audit because of scope limitation. This report issue because the auditors cannot obtain sufficient evidence. The client company must take seriously and properly documentations on accounting records. If records are too bad, the auditors will issue the qualified reports. Besides that, the awareness towards the documentation and proper accounting records should be stressed because it will affect the company performance. Actually, in the other side, there are a lot of problems when preparing the audit; it is not only at KHR, but almost all the company had been faced the same problems. For example:  Lack of facility KHR is a medium audit firm which uses the manual system to construct the working paper. They use old operating system, application system and hardware. At the same time, the printer provided in KHR only can be access by the network, hence sometimes if the networks problem, all the work done also be problem because all the staff needs to

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wait until the system okay, then the print can be done. From that, I can see, there is a lot of wasting time to wait until the machine will be okay.  Lack Of Staffs Skill From the observation that I do, it can says that lack of staffs skill because the lack of senior staffs compared to fresh graduate. As we know, fresh graduate not have any experience in doing the audit. Its take time for them to familiar with the flow of audit in order to make sure they really understand and able to handle the audit progress. Hence, supposedly must be lead by the senior audit. But in KHR, sometimes, it doesnt care if you are trainee or what, you must complete the task within the period given. Other issue that should be highlighted is: I. Application of FRS 139 Financial Instrument: Recognition & measurement. The Financial Reporting Foundation (FRF) and Malaysia Accounting Standards Board (MASB) announced that the effective date of applying FRS 139 was on 1 January 2010. It is in line with the plans of both FRF and MASB to bring full convergence with International Reporting Standards (IFRS) by 1 January 2012. As currently in Malaysia, companies can choose whether to practice Private Entity Reporting Standards (PERS) or FRS. Normally small-medium companies choose to practice PERS while big or listed companies would practice FRS. Issue highlight FRS 139 is not compulsory to be practice and it will only commence until 2013. However, if a holding company decides to implement FRS 139; therefore all its subsidiaries must apply the FRS. The problem will be faced by company when the holding companys auditor is different with subsidiary companys auditor in the responsibility of the auditors to consult their clients regarding the application of FRS 139.

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Recommendation As the auditor of the company, we consult our clients on the treatment for significant accounting changes by FRS 139. II. Inter-company loans Prior to the adoption of FRS 139, inter-company loans were recorded at cost. With the adoption of FRS 139, inter-company loans are now recorded initially at their fair values, which are estimated by discounting the expected cash flows using the current market interest rate of a loan with similar risk and tenure. Finance income and costs are recognised in profit or loss using the effective interest method. III. Property, Plant & Equipment

Recognition and measurement Items of property, plant and equipment should be stated at cost less any accumulated depreciation and any accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Issue highlight We have reviewed one of our clients additional assets for the year under review and we noted that among the additional assets are six motor vehicles. We noted that the costs of these six motor vehicles were recorded after deduction of deposits. The actual costs recognized in financial statement were incorrect whereby there are different amount of actual cost and recorded cost in general ledger.

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Recommendation We proposed to the client for making necessary adjustment to reflect the accurate balance of Property, Plant, and Equipment. As auditor, we do not make adjustment on our client accounts. Our duty is to give opinion whether the financial statement present in true and fair view. IV. Control over issuance of cheques Issue highlight We noted that at year end, our client issue cheques to trade and other payables amounting RM2.6 million. This was made in spite of the companys cash balances available at the bank account amounting RM1.5 million. However the company does not have overdraft facility. Recommendation We recommend the company to only prepare cheques based on available cash balances. V. Control over revenue cycle

Issue highlight During our test of control (TOC) on revenue cycle, we noted that there are difference between general ledger and sales report amounting RM200,000. In addition, after our review on trade receivable balances, we also noted the difference between statement of account issued to client and trade receivable balance as per GL amounting RM600,000 We were made to understand that the sales analysis report, billing system, and the accounting system are not integrated, resulting the above different. The absence of integration between these systems indicates lack of internal control of the company.

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Recommendation We recommend the company to continuously monitor the above problems to avoid any potential errors in the future. VI. Inaccurate recording of long term creditor

Issue highlight During our test of control (TOC) on purchase cycle, we find out that included under long-term creditors is a repayment schedule of outstanding electricity charges amounting RM15 million. There were no movement during the year under review. However we noted that the company have paid instalment totalling to RM3 million as per schedule proposed in the agreement during the year but recorded the said transactions in trade creditors rather than reducing long-term creditors As the effect of this treatment, the amount stated in the financial statement does not represent the real transaction and misleading will occur and that it will be reported to the user of this information. Recommendation We proposed the client to review the situation as soon as possible to ensure the accurate balance is reflected in the financial statements

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4.8

RECOMMENDATION

I.

Khairuddin Hasyudeen Razi (KHR) should improve the staff welfare and always give continuously motivations to the staffs to increase their spirit doing their job. In order to remain good staff, KHR can increase activities like super weekend. Super weekend can make once per month. The activities can be done is like watching movie, aerobic, dinner and other interesting activities. Besides, the overtime should be given to the staff continuously as they worked out till night.

II.

Audit software usage should be proposed.

Audit software is a tool for auditing. Currently, in KHR they used Microsoft Office Excel to do working paper. However, since the work is too much, KHR can propose audit software in future and giving some training for the usage. Audit software can make auditor easier to audit, and fastened. Thus it will increase productivity of staffs. In addition, if the audit software is too expensive, KHR should make provision for audit software and make an analysis which one is the best way whether buy audit software or just use Microsoft Office Excel.

III.

Each staff needs to be updated with changes in accounting policies and issuance of new audit standards.

KHR must subscribe each months some magazines related to the accounting matters like Bloomberg, The Edge, and others. Thus, each staff will present the latest accounting issue for that month in training course that has been organized each month after presentation session.

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5.0 CONCLUSION

In conclusion, after 6 months of practical training, this program successfully reaches its objectives which are to expose student to the real situation of accounting, auditing, taxation, and company secretary. I also got the real picture of accounts and not just remembering the formulas. Even some of the above are not yet teach in the university but I got experience to learn it earlier during this practical training. Practical training also provides me with useful experiences that can be used in the future and also help me in enhancing the communication skills. At the same time, I think work in audit firm as an auditor needs patience and focus. In my opinion, patience is needed because auditor needs to face with clients behavior, managers, as well as senior auditor. Focus is the most important element to be an auditor. Hence, it is crucial when we are dealing with client regarding some issues to avoid any miscommunication. I think audit is a process of learning. Every day, we will find any kind of cases and from there, we have learnt to find the solution and during struggling find the solution, actually it is a process of learning. What I can say that audit is universal. We can find a lot of interesting issues or cases. Furthermore, to be an auditor, we need to encourage ourselves to have professional skepticism. Professional skepticism is very important to identify any risk of material misstatement. Auditor need to avoid intuitive judgment in detect any material misstatement because intuitive is make a decision based on feelings not based on the evidence. Apparently, audit is a platform to those people whom willing to learn deeply in this industry. I think six months in audit firm, I have learnt a whole idea about auditing process for various clients. I have experienced in doing audit for trading company, unprofitable company, government agencies, as well as services. The exposures given to me really make me gain valuable knowledge. I have been assigned to do big job with best audit team, as well as individual jobs. Due to this, my confidence level is increasing slowly and my communication also improved as well as better attitude and more professionalism. Audit is an opportunity to expand and to growth. This is because audit can improve our thinking, and our presentation skills.
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6.0 REFERENCE

Alvin A.Arens, R. J. (2008). Auditing and Assurance Services in Malaysia. kuala Lumpur: Pearson. http://en.wikipedia.org/wiki/Audit. (n.d.). http://en.wikipedia.org/wiki/Auditor's_report. (n.d.). http://www.khr.com.my/. (n.d.).

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