Critical Thinking

[carolyn yim]

for those of us that are lacking in experience in audit, how do we think and get ideas to answer the practical questions?

[Acid]

Hi Carolyn,

If you lack experience then ofcourse use the critical thinking faculities of brain and also think like a corporate police ! Also identity areas realted to professional ethics , internal control syste , fraud , etc..


Regards

Acid

[krishna3898]

Hi,
No worries for prior audit experience,just go through GTG Text,
like examples & self examination question,and imagin yourself, how it will be,
so that you will get idea about the question.
try this way and apply,you will find good result.(am go through like that really very intersting and more confident about the paper)
Regards.
krishna

[Vandana]

Hi there,

My suggestion. Imagine you have $1,000. It is your life savings. You know you can put it into the bank and you will get 5% interest. Alternatively a friend says to you that you could invest it in his business and he will give you a 15% return minimum. So you put the money in to his business. Now YOUR money is in HIS business. you have to TRUST him. You will need to ensure he is using your money to the best of his abilities and that it is not being wasted. So here is the starting point. When ever you think about an audit procedure, as Acid says, imagine you are the corporate police - trying to ensure that there is no fraud or error and that your money is being used to the best of management's abilities.

So for all sales transactions, you want to ensure that there really is a sale to a genuine person (and you are going to get money for it). So how would you check this? Well, you would find out who ordered it, how they are paying, when the goods were sent etc etc...

If you are trying to work out if an asset, eg a machine is fairly presented in the Statement of Financial Position, you would want to see the original invoice, add the invoice to ensure it was added up correctly, see the machine and ensure it is in working order etc etc.

I think our GTG study text really tries to bring this subject alive by making it real and practical. You will get some good hints there. Hope this helps!