Walkthroughs - Chapter 7 - Audit Risk Assessment Made Easy

In this video I explain what a walkthrough is and how to perform walkthroughs of transaction cycles. Walkthroughs are performed by an auditor to review internal controls. Internal control weaknesses can require audit responses such as a test of details. Weak controls usually means more audit work for the auditor. Additional audit steps are to be added to the audit program when control weaknesses are present: more risk, more work.

I also show you what transaction cycles need a walkthrough and how to document walkthroughs.

Walkthroughs is one of the most difficult parts of audit risk assessment. So understanding how to perform this procedure is important in determining control risk and your risk of material misstatement.

0:00 Introduction to walkthroughs
1:44 Chapter 7 - Walkthroughs
2:05 What is a walkthrough?
2:33 Cradle-to-grave review of a transaction
2:50 Accounts payable example
4:10 Control weaknesses impact audit plan
4:44 What a walkthrough is not
5:40 Is everything the same as last year?
6:48 Walkthrough needed annually
6:57 Inquire, observe, inspect
7:25 Observation example
8:48 Inspection of documents
10:10 Use prior year walkthrough?
11:35 Lower control risk based on walkthrough?
12:48 Documenting walkthroughs
13:20 Narrative, flowchart, checklist
13:43 My preference is a narrative
13:58 Taking notes with iPad
14:55 Taking pictures with iPhone
15:22 Narrative walkthrough documentation
15:56 Key controls
19:02 Unimportant controls are clutter
19:27 Significant transaction cycles, accounts, disclosures
20:15 Internal controls weakness documentation
20:40 Communicate controls weaknesses
21:06 Control weakness example
21:35 Control weakness impacts audit plan
21:58 Control weakness on risk assessment summary form
22:16 Summary of walkthrough video
22:55 Next video: Overriding Controls

#CPAHallTalk

[phakishomarote]

How can I practically practice the identification of control weaknesses for all business cycles(i.e Payroll, cash & etc)? Is there any practical process descriptions you can recommend for me to practice on?

[piggy]

Where can I buy the copy of your book?