ACCA P7知识点.docx

2007 DEC.WARRENTY PROVISION审计程序ISA 540 Audit of Accounting Estimates requires that auditors should obtain sufficient audit evidence as to whether an accounting estimate, such as a warranty provision, is reasonable given the entity’s circumstances, and that disclosure is appropriate. Review and test the process used by management to develop the estimateReview contracts or orders for the terms of the warranty to gain an understanding of the obligation of CoReview correspondence with customers during the year to gain an understanding of claims already in progress at the year endPerform analytical procedures to compare the level of warranty provision year on year, and compare actual to budgeted provisions. If possible disaggregate the data, for example, compare provision for specific types of machinery or customer by customerRe-calculate the warranty provisionReview board minutes for discussion of on-going warranty claims, and for approval of the amount provided Discuss with management the assumptions she used to determine the percentage used in her calculationsConsider whether assumptions used are consistent with the auditors’ understanding of the businessCompare prior year provision with actual expenditure on warranty claims in the accounting periodCompare the current year provision with prior year and discuss any fluctuation with Kate Shannon.QUALITY CONTROL OF INDIVIDUAL AUDIT ENGAGEMENT 1.Client acceptance proceduresThere should be full documentation, and conclusion on, ethical and client acceptance issues in each audit assignment.The engagement partner should consider whether members of the audit team have complied with ethical requirements, Other procedures on client acceptance should include:– Obtaining professional clearance from previous auditors– Consideration of any conflict of interest– Money laundering procedures2.Engagement teamProcedures should be followed to ensure that the engagement team collectively has the skills, competence and time to perform the