Auditing the Expenditure Cycle

Chapter 15 (Tutor Financial Audit)

  Siklus Pengeluaran (Expenditure Cycle) mencakup
aktivitas yang berkaitan dengan perolehan dan
Definition pembayaran untuk barang dan jasa .
  (1) pembelian barang dan jasa (purchase transaction)
 (2) melakukan pembayaran (cash disbursement)
 (3) penyesuaian terhadap penjualan (purchase
Main Activities adjustments) seperti retur pembelian dan penyesuaian
harga.
  Transaction Objectives
 Balance Objective
Audit Objectives
 Disclosure Objective
1.Transactions and events (major classes of transaction)
1. Occurrence — the transactions recorded have actually taken place. (represent)
2. Completeness — all transactions that should have been recorded have been recorded.
3. Accuracy — the transactions were recorded at the appropriate amounts.
4. Cutoff — the transactions have been recorded in the correct accounting period. (right time)
5. Classification — the transactions have been recorded in the appropriate caption. (proper account)
2.Accounts balances as of period end (account)
1. Existence — assets, liabilities and equity balances exist. (what account)
2. Rights and Obligations — the entity legally controls rights to its assets and its liabilities faithfully represent its obligations.
3. Completeness — all balances that should have been recorded have been recorded.
4. Valuation and Allocation — balances that are included in the financial statements are appropriately valued and allocation
adjustments are appropriately recorded. (correct amount)
3.Presentation and disclosure (activities cycle)
1. Occurrence — the transactions and disclosures have actually occurred.
2. Completeness — all disclosures have been included in the financial statements.
3. Classification & Understandability — financial statements are clear and appropriately presented, clearly expressed.
4. Accuracy and Valuation — information is disclosed at the appropriate amounts.
  Management Misstatement of
Expense
 Pressure to Understate Expense : agar dapat
melaporkan target profitabilitas yang tidak tercapai .

 Pressure to Understate Liabilities : agar dapat

Inherent Risk melaporkan working capital yang tinggi.

 Other Misstatement Factors

 High Volume of Transaction
 Unauthorized Purchase and Cash Disbursement
 Double Payment
  Test of Control
Audit Procedure  Substantive Test
  Menguji efektifitas kontrol yang umum.
 Menggunakan computer-assisted-audit-
Design Test Of technique/CAAT untuk menguji efektifitas kontrol

Control  Menguji efektifitas prosedur perusahaan

  Initial Procedures (obtaining data, preparation)
 Analytical Procedures (calculation of financial ratio)

Design
Substantive Test
  Tests of Details of Transactions
 Vouch Recorded Payables to Supporting
Documentation

 Perform Cutoff Tests

Design  Purchases cutoff tests

Substantive Test  Cash disbursement cutoff tests

 Purchase return cutoff tests

 Perform Search for Unrecorded Payables

 Subsequent payments
  Tests of Details of Balances
 Accounts Payable Confirmations

Design  Forms of Confirmation

 Positive Confirmation
Substantive Test  Negative Confirmation

 Reconcile Unconfirmed Payables received by client to

Vendor Statements
 Design  Tests of Details of Disclosures
Substantive Test  Compare Statement Presentation with GAAP
  Initiating Purchase (purchase made with unauthorized
purpose, employee create fictitious vendor)
 Receiving Good & Service (goods received but not
Potential recorded)

Misstatement  Recording Liabilities (liabilities may be recorded for

goods not received, incorrect amount recorded,
purchase may be incorrectly posted)
THANKYOU