smsingla, I am still not done with Transactions. I am still struggling but I started writing notes on all of that section. That really helped me understand whats going on.
Are you using Becker?
basically there are 2 main things that the auditor is doing here:
For each cycle:
1. Looking to see if internal controls are effective and
2. transactions, balances and presentation & disclosures recorded properly (GAAP)
I came up with a mnemonic using Becker's help of course..lol..
Transactions, Account balances and Presentation and disclosures: TAP
T: COVE U
A: CVER
P: CVR U
C=completeness, O=CutOff, V=Valuation, Allocation and Accuracy, E= Existence and occurrence, R= Rights and obligations and U= Understandibility and Classification
These are the assertions you are following up on in each cycle.
And for each transaction cycle you hv to evaluate the audit risk: overstatement/understatement.
For e.g: Revenue will be overstated, so we vouch for existence and start from F/S and go to the bottom, which would be the source documents.
That is how I am breaking it down. Hope it helps. I wish there were an easier way!
Quinacridone? Any suggestions?