Super Berhad’s

For Scenario 5, a sample of Super Berhad’s accruals is needed for valuation testing. Steps that can be taken is to do a manual listing that listed down all the accruals amount made by client as at year end and check the amount of accruals made by client as at year end which are above materiality. In addition, gather previous month supplier invoice for the samples that are chosen.

For the analytical procedure, the auditor can performed Test of Control on the management looking for evidence that the control procedure has been performed. This is to ensure the management did their obligations to vendors for purchases for supplies that had been made. This can be done so by inquiring the management and also inspecting related documents that leads to accruals. If the auditor findings are that the internal control is strong therefore the Substantive Test which is the next procedure would be less extensive. Whether the internal control is strong or vice versa the auditor’s concern lies on the accruals that could be understated. And this is where substantive test comes in. First, the auditor can reconcile purchasing journal to the creditors’ ledger by looking at the amount that may be voided or misstated by the management. The auditor can vouch selected amount from the trade accounts payables listing and accruals listing to supporting