Instruction: Fill out the needed information in this table.

To elicit more precise answers, please refer

to the sample financial statements and audit reports below.

  Audit of Cooperatives Audit of Construction Companies

Pre-Planning
What are the The most prominent accounts in The most prominent accounts in
prominent accounts these financial statements are loans these financial statements are
used in this and receivables, investment receivables and property, plant, and
particular industry? property, and current loans payable. equipment.
The financial statement assertions
affected are as follows:
The financial statement assertions
 Loans and receivables:
affected are as follows:
completeness, classification,
What financial  Receivables: existence,
accuracy, valuation
statement assertions valuation, completeness,
 Investment property: existence,
are affected by these accuracy
valuation, completeness, rights
accounts?  Property, plant, and equipment:
and obligations
existence, valuation,
 Current loans payable:
completeness
completeness, existence,
valuation, rights and obligations
Planning
What are the audit The following are unique audit Audit risk factors include:
risk factors/threats threats of an agricultural cooperative  Size of project
that are mainly with corresponding modification of  Type of project
expected to arise in audit procedures per case:  Timing and scheduling
this particular  When no documents exist to  Location
industry? evidence title to raised products,  Weather
reviews of cost records, yield  Owner/investor
statistics, and supporting
 Subcontractors
documents should indicate the
 Bid spread
nature and extent of the farming
 Profit fade
activity and thus provide that
 Underbilling
evidence.
 Type of contract
 When there is a lack of
documentary evidence to support  Claims
the ownership of raised livestock,  Material costs
the number of animals
represented as produced for a
period may be tested for
reasonableness by applying
normal productivity rates to the
productive animals in the breeding
herd. Inspection of records
 evidencing real estate ownership
may provide additional support for
ownership of crops and livestock
on the land. Tenant lease
agreements should also be
considered.
 Inventories of agricultural
products are often stored in public
warehouses. The auditor should
perform those procedures
considered necessary (a) to
obtain reasonable assurance that
the inventories exist, are owned
by the entity, and are in a
marketable condition and (b) to
determine whether they are
pledged as collateral for loans.
(See SAS No. 1, sec. 331.14, as
amended by SAS No. 43.)
Internal Control Considerations
Transaction cycles from the
What are the construction life cycle which include
 Marketing cycle
transaction cycles the following stages:
 Purchasing cycle
that are greatly  Project initiation and conception
 Production cycle
affected by the  Project planning and definition
 Sales cycle
nature of their  Project execution and launch
business?  Payroll cycle
 Project performance
 Project close
Substantive Audit Procedures
Based on the above
assertions, what To address the stated assertions, the auditor may perform confirmation,
audit procedures vouching, inspection, reconciliation and recalculation.
should be applied?

References:
American Institute of Certified Public Accountants. Agribusiness Special Committee, "Audits of
agricultural producers and agricultural cooperatives (1987); Audit and accounting guide:"
(1987). Industry Guides (AAGs), Risk Alerts, and Checklists. 224.
https://egrove.olemiss.edu/aicpa_indev/224

American Institute of Certified Public Accountants. (2018). Audit and accounting guide: Construction
contractors. https://b-ok.asia/book/5411318/d09cba
Audit debt. (2022). https://accountinguide.com/audit-debt/

Auditing investment: assertions, risks, and key procedures. (2022).

https://www.wikiaccounting.com/auditing-investment/

The audit procedures for loan and receivables: Practical guides. (2022). https://www.accountinghub-
online.com/the-audit-procedures-for-loan-and-advances-practical-guides/

What are the five phases of the construction life cycle? (2022).
https://www.accruent.com/resources/blog-posts/what-are-five-phases-construction-life-cycle