Professional Documents
Culture Documents
,
·1 Examine transactions with major customers, supplier, borrowers, & lenders for indica-
tions of relationship
Examine large, unusual, or nonrecurring transactions at or near year-end
Examine confirmations of loans receivable & payable for guarantees
If related-party transactions are identified, auditor should
Obtain understanding of business purpose of transaction
·2 Examine invoices, agreements, & contracts
·3 Determine whether the directors have approved the transaction
·4 Evaluate disclosures for reasonableness
Focus on
Evidence - Module 3 140
Management Representations
The auditor must obtain written representations from management indicating
·5 Information & data was available to the auditor during the examination
·6 Responsibility for the financial statements rests with management
Errors, fraud, & material litigation that are known at year-end have been communicated
·7 Subsequent events that may effect carrying values have been communicated
·8 Plans of the company that may effect carrying values have been
communicated
Oral information provided to the auditor was accurate & complete
Noncompliance with laws & regulations that are known at year-end have been communi-
cated
Disclosure of major transactions, events, or circumstances affecting the client at year-
end has been made
Focus on
Evidence - Module 3
141