Audit Program, Materiality, and Rent Holiday Essay - 1

Essays on Audit Program, Materiality, and Rent Holiday Essay The paper "Audit Program, Materiality, and Rent Holiday" is a brilliant example of an essay on finance and accounting. Audit Program:The audit program is complete guidance regarding the evaluation process of businesses. It includes instructions on what and how much amount of data as evidence should be collected and analyzed. Further who will collect and analyze the data. Firstly all the accounting principles are understood and then audit strategy is formalized. It portrays an understanding and insights about the system and it is a fusion of mix of compliance which is basically tests of control and some other substantive tests that the auditors intend to do. The major purpose is to assist the performance of audit, record and control the implementation of audit, record all the objectives, purposes, procedures, sample size, timing and the basis of selection and it serves as evidence to the opinion of one performing an audit (Arter).Materiality:Materiality refers to the qualitative and quantitative omissions or misstatements which make it apparent verdict that influence the decision making of users that are mostly taken on the basis of financial statements.   It is mostly related to all the important errors, balances, transactions and errors which are a part of financial statements. Therefore, it defines all the verge and limit points after which the financial statements become significant to the users. So the information which is a part of financial statements has to be sufficient and complete in all the material aspects in order for them to signify an actual and fair presentation of the business (Accounting-Simplified.com).Rent Holiday:Rent holiday is a free or highly reduced rent for some specific time and that time period must not exceed twenty-four months. This rent is allocated in the lease for this mentioned period. Qualifying as a rent holiday depends on many things such as the number of months, the term of the lease, the amount reduced and the escalation clauses regarding the future rent payments keeping market conditions in the consideration (Bailey and Gaulin).The rent holiday has to be treated and recognized on an equal basis over the life of the lease, unlike the operating leases that do not affect the company’s balance sheet. The difference between rent expense and the rent actually paid is calculated and is considered as a deferred liability if the rents in the lease are increasing but if the rents are decreasing then it is taken as an asset. The future commitments are mentioned in the footnotes to the financial statements whether they are related to the capital or to the operations ( Financial Computer Systems, Inc).Audit Program Final:The audit program is final when the consideration of an entity’s internal program is complete. It should clearly define the scope of the audit and it should obtain the cooperation of all the auditees. Further, the team of auditors is formed up with the defined leading auditor, the audit plan has gained approval and has become a part of organization set of policies, it clearly reflects the all the purposes and objectives of audit and a report presenting all these are prepared by the audit program manager then the audit program is final and ready to launch (Kausek).