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Audit Fieldwork

Audit fieldwork involves executing the audit plan through substantive and control testing to gather evidence for the auditor's opinion. Key activities include preparing for fieldwork, testing internal controls, performing substantive procedures, and documenting findings. Effective communication and supervision throughout the process are essential to address issues and refine the audit focus.

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7 views4 pages

Audit Fieldwork

Audit fieldwork involves executing the audit plan through substantive and control testing to gather evidence for the auditor's opinion. Key activities include preparing for fieldwork, testing internal controls, performing substantive procedures, and documenting findings. Effective communication and supervision throughout the process are essential to address issues and refine the audit focus.

Uploaded by

vanessa claire abad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Audit Fieldwork: Key Activities and Procedures

Audit fieldwork is the phase of the audit where auditors execute the audit plan and perform
detailed substantive and control testing to gather sufficient and appropriate audit evidence.
This typically happens on-site at the client’s premises or remotely and forms the backbone of
the auditor’s opinion.

✅ Objectives of Audit Fieldwork


●​ Test internal controls to determine their effectiveness.​

●​ Perform substantive procedures (tests of details and analytical procedures).​

●​ Obtain audit evidence that supports the auditor’s conclusions.​

●​ Identify and evaluate misstatements or errors.​

●​ Communicate findings to management and refine audit focus.​

🔹 1. Preparation Before Fieldwork


●​ Finalize the audit plan and risk assessment.​

●​ Assign roles and responsibilities to team members.​

●​ Schedule site visits with the client.​

●​ Prepare working paper templates, checklists, and confirmations.​

🔹 2. Execution of Audit Fieldwork


A. Understanding and Testing Internal Controls
●​ Walkthroughs and flowcharts to understand key processes.​

●​ Test design and implementation of controls.​

●​ Perform tests of operating effectiveness (if relying on controls).​

B. Substantive Procedures

1. Tests of Details

●​ Assets: Inspect invoices, perform physical inventory counts, confirm cash and
receivables.​

●​ Liabilities: Review loan agreements, confirm payables, assess completeness.​

●​ Revenue: Trace transactions to sales invoices and cash receipts.​

●​ Expenses: Match expenses to supporting documents, check cut-offs.​

●​ Equity: Examine changes in share capital, retained earnings, dividends.​

2. Substantive Analytical Procedures

●​ Compare actual vs. prior year or budgeted figures.​

●​ Use ratio analysis (e.g., gross margin, current ratio) to detect anomalies.​

●​ Investigate significant fluctuations or trends.​

C. Sampling

●​ Use audit sampling techniques (statistical or judgmental) to test large populations.​

●​ Document rationale for sample sizes and selection.​

D. Obtaining External Confirmations

●​ Send confirmations to:​

○​ Banks (cash, loans)​


○​ Debtors (receivables)​

○​ Creditors (payables)​

○​ Lawyers (legal contingencies)​

●​ Follow up on non-responses or exceptions.​

🔹 3. Documentation
●​ Prepare detailed working papers:​

○​ Show what work was performed​

○​ Who performed and reviewed the work​

○​ Evidence obtained and conclusions reached​

●​ Ensure compliance with ISA 230 or AU-C 230 on audit documentation.​

🔹 4. Identifying Misstatements
●​ Track all misstatements (corrected and uncorrected).​

●​ Evaluate whether they are material.​

●​ Assess the impact on financial statements and disclosures.​

🔹 5. Supervision and Review


●​ Senior auditors and managers review fieldwork continuously.​

●​ Address any significant issues or exceptions immediately.​


●​ Communicate with client staff to clarify documents or transactions.​

🔹 6. Communication During Fieldwork


●​ Regular updates to audit manager and client contacts.​

●​ Preliminary findings or control weaknesses discussed informally.​

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