Showing papers on "Audit published in 1975"

Peer Review by Criteria Mapping: Criteria for Diabetes Mellitus: The Use of Decision-Making in Chart Audit

Abstract: The UCLA Experimental Medical Care Review Organization (EMCRO), in an attempt to minimize the problem of applying a general list of criteria to each patient with a specific condition, has developed a method called Criteria Mapping. This method uses sequential judgments based on the specific clinical data for the individual patient to assess the quality of care by medical record audit. The method does not penalize the physician for omitting unnecessary procedures by allowing alternate decisions when appropriate, and provides supporting reference materials to allow nonphysicians to make reliable medical interpretations of the data in medical records. It is expected that this method will more accurately reflect the physicians' intentions, and that process, when measured by this approach, may correlate better with the outcome of medical care.

Montgomery's Auditing

Abstract: THE AUDIT ENVIRONMENT. An Overview of Auditing. Organization and Structure of the Auditing Profession. Auditing Standards and Professional Conduct. Auditor's Professional Responsibility. Auditor's Legal Liability. THEORY AND CONCEPTS. The Audit Process. Engagement Planning and Management. Overview of Internal Control. Understanding Entity-Level Controls. Understanding Activity-Level Controls. Assessing Control Risk and Developing the Audit Strategy. Auditing the Revenue Cycle. Auditing the Purchasing Cycle. Substantive Tests. The Use of Audit Sampling. AUDITING SPECIFIC ACCOUNTS. Auditing Cash and Accounts Receivable. Auditing Inventories and Cost of Sales. Auditing Investments, Prepayments, and Accruals, and Property, Plant, and Equipment. Auditing Accounts Payable, Income Taxes, Debt and Equity, and Disclosures. COMPLETING THE WORK AND REPORTING THE RESULTS. Completing the Audit. Reporting on Audited Financial Statements. Reporting on Audit-Related Services and on Certain Nonaudit Services. Attestation Engagements. Compliance Auditing.

A Decision-Theory Approach to the Sampling Problem in Auditing

Abstract: The independent auditor must decide whether a client's reported account balance (s) are "fairly" stated or misstated by a "material" amount. The auditor's decision problem with respect to a particular account balance has been characterized as one of testing a simple null hypothesis (that the "true" balance is equal to the reported balance) against a simple alternative hypothesis (that the true balance is equal to the reported balance plus or minus a "material" error).' In such an environment, the auditor has two basic action choices: he may (1) accept the reported balances as correct or (2) reject the reported balances. Since either action choice may be in error, and thus expensive, the auditor is motivated to consider other audit tests to increase his confidence as to the true state of the account with respect to the client's statements. The appropriate extent of such tests is the concern here. While the same decision analysis concepts are relevant at any point during the audit process, the emphasis here is on dollar-value sampling in tests of balances. Therefore, the decision analysis will be set at the point in time after the study and evaluation of internal control but before a decision concerning any additional tests of details.

A Statistical Technique for Analytical Review

Abstract: As a background for the subject of this paper I will present several quotations from section 320 of the Statement on Auditing Standards No. 1 (henceforth SAS No. 1), which was issued in November 1972 by the Committee on Auditing Procedure of the American Institute of Certified Public Accountants. This Committee was the predecessor of the present Auditing Standards Executive Committee and SAS No. 1 was its final pronouncement. SAS No. 1 is a codification of previous Statements on Auditing Procedure (SAPs) Nos. 33 through 54, and No. 33 in turn was a codification of prior Statements. Section 320 of SAS No. 1 is primarily a codification of SAP No. 54, which included as an appendix a report issued by the AICPA Committee on Statistical Sampling in July 1964.1 The subject of section 320 is "The Auditor's Study and Evaluation of Internal Control," but the last major topic in the section deals with the correlation of such evaluation with other auditing procedures. I believe that section, together with the two related appendixes, provides the most concise but complete statement of the broad conceptual framework for auditing that is presently available in official pronouncements. Many of the concepts expressed in that section are readily adaptable to restatement in the form of partial or complete mathematical models and to application by means of statistical methodology, which is the general theme of this conference. It is for these reasons that I draw on this source to provide perspective for the subject of this paper.

Generalized audit trail requirements and concepts for data base applications

Abstract: Discussed is a data base audit trail. It is defined here to be a generalized recording of "who did what to whom, when, and in what sequence." This information is to be used to satisfy system integrity, recovery, auditing, and security requirements of advanced integrated data base/data communication systems. This paper hypothesizes what information must be retained in the audit trail to permit recovery and audit later in time and a scheme of organizing the contents of the audit trail so as to provide the required functions at minimum overhead. Introduced are the concepts of types of audit required, DB/DC audit assumptions, time domain addressing, time sequences required to support versions of data, what constitutes an audit trail, and implementation considerations.

Decision Theory Aspects of Internal Control System Design/Compliance and Substantive Tests

Abstract: Statement on Auditing Standards No. 1 (SAS No. 1), section 320,1 entitled "The Auditor's Study and Evaluation of Internal Control," discusses two basic types of audit procedures which the auditor conducts in forming an opinion as to the fairness of an auditee's (client's) reported account balances. These procedures are (1) the study and evaluation of the internal control subsystem(s) generating account balances and (2) "substantive tests" of the resulting balances. Included in the first is a review of system design and tests of compliance of system operation with its design. Included in the second is analytical review of trends and relationships and tests of the details of balances. In this paper, I develop an approach to the problem of audit evidence through the economic combination of audit tests within a decision-theory framework which is consistent with the integrated approach of section 320. Specifically, I will consider the integration of the role of internal control system design, compliance tests, analytical review, and tests of details in aud planning and implementation decisions. A numerical example will be used to show how the approach can be operationalized and to show the sensitivity of the model to underlying conditions. The traditional approach will also be applied to the example conditions for comparison and contrast.

Auditor's Loss Functions Implicit in Consumption-Investment Model

Abstract: In a previous paper,' I demonstrated how the problems faced by the auditor of a firm's published annual financial statements in deciding (1) how much audit evidence to obtain and (2) what set of balance sheet valuation numbers to choose in the light of this audit evidence can be regarded as a problem in Bayesian point estimation. In effect, the auditor was viewed as picking a vector of numbers (the balance sheet) to summarize his posterior probability distribution (i.e., posterior to his audit examination) of those balance sheet parameters for which he is held responsible by the nature of his audit engagement. He does this subject to a loss function whereby he is "penalized" for discrepancies between the balance sheet numbers so chosen and their subsequent realization. Given the professional nature of the auditor's engagement, it seems reasonable to suggest that this loss function really derives from the various financial statement users. If they rely on the audited statements as inputs into decisions when those statements contain auditor's errors, they will suffer an opportunity loss of expected utility. This raises the question, of course, of who these users are and how financial statement errors operate to cause utility losses. The approach in this paper is to pick a specific, well-defined normative decision problem for which audited financial statements have the potential to be useful and find the loss function that is implicit in it. The problem I have chosen is an individual's consumption-investment

Uniformity of Auditing Standards

Abstract: Recent public criticism, litigation, and SEC pressures have generated a critical issue of "quality control" within the auditing profession. As with all service oriented professions, a direct evaluation of the quality of services rendered is a sensitive, exceedingly difficult, yet, pressing problem. Management audits represent an attempt at direct evaluation. The SEC, the Institute, and at least one "big eight" firm (Arthur Andersen) have opted for this method of quality control. On a firm by firm basis, management audits present a viable approach to quality control. Among firms, however, it will be difficult to maintain consistent reviews. In addition, such programs are likely to be extremely costly. One aspect of a quality control program for the profession is the degree to which auditing standards are, in fact, being uniformly applied. This paper reports on two alternative approaches for monitoring audit quality (uniformity) among CPA firms. These approaches are less costly, but they are also a more indirect measure of audit quality than management audits.

Physician Extenders in Walk-In Clinics: A Prospective Evaluation of the AMOSIST Program

Abstract: The Automated Military Outpatient System (AMOS) Project was developed to improve the ambulatory care of patients with episodic and chronic illnesses. During the development of its episodic care component, the relative frequency of problems treated by the walk-in clinic staff was analyzed and showed a high volume of acute minor illnesses. A simple, conservative triage system run by non-professionals was developed to screen patients to a clinic for benign, selflimited illnesses run by physician-extenders. This group, the equivalent of civilian licensed practical nurses and nurses' aides, was trained in a task-oriented fashion to treat 44 common minor illnesses. Clinical algorithms for these illnesses were developed and used as training tools, memory aids, and auditing instruments. This program is now operating in 26 US Army hospitals and caring for some 44,000 patients a month in the continental United States. We report the results of a prospective audit of the corpsmen and a study of the patient attitude and acceptance of the program.

Considerations in Choosing Statistical Sampling Procedures in Auditing

Abstract: The choice of statistical sampling procedures in auditing encompasses selecting (1) a method of sampling, (2) one or more statistics to be calculated from the sample, and (3) a methodology for assessing the sample results. It is the premise of this paper that the audit objectives, the environment in which the audit occurs, and the audit procedures utilized greatly influence the choice made. Since these factors vary widely from one audit situation to another, no one statistical sampling procedure is likely to be appropriate for all circumstances. In this paper, we consider the effects of audit objectives, the environment, and audit procedures on the selection of a sampling procedure and the specific design of the sample. The discussion will focus on some of the major considerations in the selection of a sampling procedure and the design of the sample and is not intended to include every possible consideration. We conclude the paper with a simple, tentative model of a decision process which an auditor might utilize in choosing a statistical sampling procedure.

Acl: Audit Command Language

Abstract: To a growing extent auditors depend on man-machine interfaces with the client’s information system in order to perform external or internal audits. Over twenty-five different software packages are ...

Discussion of The Real Risks in Audit Sampling

Abstract: It is a pleasure for me to attend this conference and discuss the Teitlebaum-Robinson paper. I think the paper contains a useful idea-namely, that actual sampling risks may be larger than nominal sampling risks when the sampling distribution is not close to its assumed form. This is clearly an important consideration for all statistical techniques that depend on the sampling distribution's being approximately normal. The empirical simulation study conducted by Neter and Loebbeckel demonstrates the seriousness of the problem. The paper presents an alternative definition of audit risk and then examines implications of that risk concept for some sampling plans. My major comments concern the appropriateness of this definition. Additionally, I have some comments related to implications of the definition. The authors define audit risk as: "the maximum chance of stating an upper error limit of less than the true actual error value present in the population, however the errors might be distributed in that population and whatever their total value." This definition makes the risk independent of both the distribution of error amounts in the population and the total population error. Is this appropriate? Does it make sense to speak of the risk of a sampling plan that is independent of the amount of error in the population? I do not believe so. Section 320A.14 of Statement of Auditing Standards No. 1 says that audit risk is a combination of two separate risks: "The first of these is that material errors will occur in the accounting process by which the financial statements are developed. The second is that any material errors that occur will not be detected in the auditor's examination." This definition clearly makes the risk dependent on the amount of error present. Furthermore, it says that the primary risk of the auditor's statistical test of details is failure to

What kind of criteria

Abstract: The modern concept of medical audit mandates comparison of care against preset explicit criteria. The format in which those criteria are framed plays a crucial role in determining the types of deficiences liable to be uncovered. Formats describing care as "consistent with" acceptable practice do not reveal meaningful information, and the Joint Commission on Accreditation of Hospitals' emphasis on "outcome" to the exclusion of "process" is also unacceptable. A detailed format for disease-specific criteria is described; it may not be feasible for widespread use. RECENTLY DISTRIBUTED guidelines, from the Department of Health, Education and Welfare (HEW)5 and the Joint Commission on Accreditation of Hospitals (JCAH ) 3 now call for the adoption of explicit criteria against which care is to be measured and evaluated. In each instance, it is emphasized that those criteria should be made known to (or better, drawn up by) the hospitals' medical staffs prior to the start of the audit. Thus, as now envisioned, medical audit will not only measure how well a physician performs, but will also point the direction his care will take, and in some instances clearly delineate its shape. This tendency of audit to force medical care into some more or less rigid mold appears almost certainly .to be responsible for much of the opposition, both expressed and

Adding retrospective audit.

Abstract: St. Luke's Hospital Center's nursing audit was described nearly three years ago(l). In 1972, our audits, already three years old, gave nurses many opportunities to enhance their practice and encouraged self-evaluation in a supportive climate. Nevertheless, the Joint Commission on Accreditation of Hospitals concluded that our audit was primarily a process audit (a concurrent review of care) and was systems centered. They advised including their recommended action-oriented retrospective audit, a review of outcomes of care(2).

Social Auditing: An Experimental Approach

Abstract: The article discusses research on how well the Sanitation Department of Fayetteville has satisfied the objectives of the department's customers, creditors, community, government, management, employ...

A survey and critical analysis of current literature on the post audit of capital expenditure

Abstract: This Thesis is brought to you for free and open access. It has been accepted for inclusion in Dissertations and Theses by an authorized administrator of PDXScholar. For more information, please contact pdxscholar@pdx.edu. Recommended Citation Katke, Gene Albert, "A survey and critical analysis of current literature on the post audit of capital expenditure" (1975). Dissertations and Theses. Paper 2253.

Toward a productivity audit.

Abstract: In this paper the authors develop the initial parameters of a model to audit the process of productivity in large-scale organizations. The model, known as the productivity audit, is based on an ope...