Test of Controls and Transaction Cycles

[rafia]

Hi
ive given a read to the gtg f8 textbook and i must say that im highly impressed by the layout of the book .........its really informative and easy to follow plus the synopsis made studying so much easier!
however after reading transaction cycles and moving on to test of controls...........im jumbling all the info and i can hardly seem to remember anything.......now can somebody tell me whether im supposed to learn all the points in these chapters cause im getting a little panicky at the mere fact that i have to memorise so many points

Moreover if one compares the `Audit of specific items' chap E3 in gtg to similar chaps in ***
there r some glaring differences between the two!!!im confused as to which one i should follow?where as in gtg they have explained assertions and then substantive procedures to check account balances etc for receiveables lets say..the *** textbook has included many other points and i was going through the kit and saw a question titled COOGEE which required us to state
a.THE procedures one would apply in verifying the general allowance for bad and doubtful debts
b.The procedures one would apply in verifying the specific allowance for bad and doubtful debts
i cant seem to find an appropriate answer to these queries.........:unsure:

[syed]

having read n learnt the risks and Ctrl objectives arrivig in receivables cycle,
i think we need much practical knowledge in checking n assessing the over all Doubtful debts figure in Fin.Statments and then work back wards to
the T accounts and
Documentary evidence relating to receivables accout:

a){ensuring the control's presence n effectiveness (suggesting controling activities) and

b)confirming the assertions thrugh audit procedures,( bad debs n doubtful debts etc, while focusing on the Assertions relevent at financial statements level (SFP and statement of income) for the item bieng scrutinised.
and so let me see the COGEE-q my self, before we can discuss it..
best regards..
syed hassan.

[Dazy]

Hi Rafia,

It’s good to see you studying F8. I wish you best luck for F7 and F9 papers.

Relax about test of controls and transaction cycle as you are not supposed to memorise all the points. You can understand these cycles better if you read them for atleast 2-3 times. The given are just for your understanding purpose. If you see the actual exam papers, they will always give you some scenario to which you have to relate the transaction cycles. So read and understand the logic behind every stage of transaction.

Regarding the assertions and substantive procedures, whenever you are verifying any audit procedure, you have to verify the assertions. Assertions such as occurrence, completeness are the causes why audit procedures are carried out. When auditor finds an adequate audit procedure to support every assertion, then he can assure that the transactions are true and fair.

Regarding the inclusion of many points by ***, the number of points to be included depends upon the marks for which the question is asked. If you have given 4 points in your answer, it may be sufficient for a 4-5 marks question, but it will not be adequate for 8-10 marks question. So you will have to decide the inclusion of points on the basis of the marks.

[jodukwe]

the questions should always be answered according to the points allocated...too many answers are a waste of time and too little will gain less marks..