Margins and Page Breaks

AUDIT PROGRAMMES

This file contains the audit programmes that you have created. You have successfully completed the first step of a two part process. Before you rush to print off these programmes please take time to consider the following tips.

Margins and Page Breaks

When using earlier versions of the manual you may have experienced margin problems printing the pages. This happens due to manual users all having different ‘normal' templates. To resolve this we have inserted in the code, a standard template for use when running Creator. If you want to be sure there is no problem with the created files, view through ‘print preview'.

Creator has been designed to start each individual section of the file on a new page. However, it is worth checking, before printing off lots of pages, that the programmes fit properly on each page. (The package will vary depending on the settings on the printer that you use.) The Audit Manual toolbar (see below) will help you insert page breaks if necessary.

Tailoring your Audit Programmes with the Audit Manual Toolbar

We have created a specific Audit Manual toolbar to help you tailor your audit file documentation:

(TIP - if the toolbar does not appear automatically, reveal it by selecting View / Toolbars / Audit Manual from the Word menus).

The icons will assist you with a variety of tasks as follows:

First icon: inserting page break

Second icon: striking through tests

Third icon: deleting an entire test

Fourth icon: inserting a new row to insert a test

Automatic numbering

The programmes have been set up using automatic numbering in Word, with each section of each programme starting at test number 1. As and when you add or remove lines (see below), the numbers of the tests will automatically be updated.

Line by line tailoring

It is likely that you will need to add or delete tests in the audit programmes. The programmes are all set up as word tables with each test filed in a separate row. There are a number of ways of editing them, but as a guide:

Adding tests

• Add extra words to any row; or

• Insert a new row to the table and the numbering will update automatically. The toolbar in the top right corner of your screen (see above) contains a short cut to help you do this.

Deleting or striking through tests

• Delete unnecessary words from any row; or

• Delete the entire row from the table, using the shortcut button in the toolbar (see above), or;

• Strike through the row, or words, using the shortcut button in the toolbar (see above). NB. This helps to keep control over what has been considered unnecessary!

AUDIT AND ACCOUNTS PROGRAMME – TAXATION

C3-1

AUDIT OBJECTIVE

• Appropriate provision for taxation has been made and has been properly disclosed. SCH REF /

WORK DONE

A CONFIRMATION OF SYSTEMS AND GENERAL

1. To the extent that this is relevant and is not already covered by the bank payments and creditors systems (tested elsewhere), confirm our record and understanding of the taxation system and related controls, either by:

(a) performing a walkthrough test; or

(b) observation and enquiry.

2. If not covered in C below, prepare or obtain a lead schedule.

3. Reconcile the lead schedule to the final accounts.

4. Analyse corporation tax as required for statutory accounts.

5. Check casts on lead and supporting schedules.

6. Agree lead schedule to nominal ledger or equivalent.

7. Agree opening balances and comparatives to previous period.

B SYSTEMS (TESTS OF OPERATING EFFECTIVENESS)

1. For controls procedures (as required on B33/PF5/C2), select a sample across the population and test that the control has been properly applied.

C NON-AUDIT SERVICES (occurrence, completeness, accuracy, cutoff)

1. Prepare a schedule of taxation paid and vouch all payments with tax files / assessments.

2. Prepare draft tax computations and ensure they are supported by schedules of addbacks and other information required for the computations.

For example Entertaining and gifts

Donations

Repairs

Sundries

Professional fees

3. Review detailed schedules of all directors' loan accounts for the period, to ascertain if the account is overdrawn at any time. (Section D of file.)

4. Review directors' BIK schedules. (Section D of file.) Consider items excluded by dispensation.

5. Prepare a tax control account, allocating the charge between current period and prior periods.

6. Prepare a deferred tax computation by scheduling all timing differences.

7. Prepare a tax reconciliation.

8. Other work:

AUDIT AND ACCOUNTS PROGRAMME – TAXATION

C3-2

Guidance

Use this programme when all or some audit evidence is to be obtained through use of analytical procedures.

D ANALYTICAL PROCEDURES (occurrence, completeness, accuracy, cutoff)

For each of the following, where appropriate, identify expectations, prepare calculations, note reasons for major fluctuations and obtain corroborative evidence to support the explanations. SCH REF /

WORK DONE

1. Ensure that accounting policies are

(a) All recorded on file;

(b) Consistent with previous periods;

(c) Appropriate;

(d) In accordance with Accounting Standards and Company Law.

2. Review the proof of tax for unusual items.

3. Review computation adjustments in comparison with last period for reasonableness.

4. Other tests:

Additional testing

Have the audit objectives been achieved?

If NO, write in the tests on C4 or tailor down the programme on C5 as necessary.

NB Typically for taxation, the following key assertions may still need to be achieved (together with the common tests found on C5 to achieve them):

• Occurrence, completeness, accuracy and cutoff of corporation tax (test 7)

Yes / No

AUDIT AND ACCOUNTS PROGRAMME – TAXATION

C4

Guidance

Use this programme to record specific tests required where:

• audit objectives are not fully achieved by C3-1/C3-2; or

• C3-1/C3-2 are not being used, due to the size of the company.

For suitable tests of detail refer to the bank of tests, C5.

Alternatively use C5 as the audit programme, deleting unnecessary steps.

TAXATION SCH REF / WORK DONE

OBJECTIVES

• OCCURRENCE

(transactions pertain to the entity)

• COMPLETENESS

(no unrecorded transactions or liabilities)

• ACCURACY

(transactions at the proper amount)

• CUTOFF

(transactions allocated to the proper period)

AUDIT