Audit Quiz 3
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each of the black spaces below before clicking
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| what are assertions? | show 🗑
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| show | assets or liabilities of the company exist at a given date and recorded transactions have occurred during a given period
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| what assertion relates to an account being potentially overstated? | show 🗑
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| what assertion relates to an account being potentially understated? | show 🗑
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| what is completeness | show 🗑
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| what is valuation or allocation | show 🗑
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| what is rights and obligations | show 🗑
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| what is presentation and disclosure | show 🗑
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| show | - is it recorded?
- is the depreciation schedule disclosed?
- is the asset properly classified as long-term?
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| show | - inspect purchase invoices
- recalculate depreciation expense
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| show | - confirm in writing
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| show | - read contracts
- look for payments
- ask management
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| show | test the allowance for doubtful accounts
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| show | companies are not motivated to understate their assets
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| show | all the information from whatever source used by the auditor in arriving at the conclusions on which the audit opinion is based
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| what are the 3 concepts of audit evidence? | show 🗑
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| what are the different natures of audit evidence you can use? | show 🗑
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| show | measure of the quantity of audit evidence
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| what is the relationship between the risk of misstatement and the quantity of audit evidence | show 🗑
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| what is the relationship between the quality of audit evidence and the quantity of audit evidence | show 🗑
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| show | measure of the quality of audit evidence
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| what is relevance | show 🗑
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| show | refers to whether a particular type of evidence can be relied upon to signal the true state of an assertion
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| how does the source of the evidence relate to reliability? | show 🗑
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| show | effective controls yield more reliable audit evidence
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| how does the auditor's direct personal knowledge relate to reliability? | show 🗑
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| how does documentary evidence relate to reliability? | show 🗑
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| show | original signed copies of agreements are better than photocopies or PDFs
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| what does it mean for evidence to be persuasive? | show 🗑
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| what are audit procedures? | show 🗑
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| what is an audit program? | show 🗑
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| show | 1. risk assessment procedures
2. tests of controls
3. substantive procedures
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| what are the 2 parts of substantive procedures? | show 🗑
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| why is inspection of records and documents important? | show 🗑
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| what direction does vouching/occurrence/existence go | show 🗑
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| what direction does tracing/completeness go | show 🗑
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| show | physical examination of a tangible asset; tests existence but not rights and obligations
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| what does observation involve? | show 🗑
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| what does inquiry involve? | show 🗑
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| show | obtaining a representation of information or of an existing condition directly from a third party
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| show | determining the mathematical accuracy of documents or records
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| what does reperformance involve? | show 🗑
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| show | depreciation expense, accrued interest, sales invoices
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| what are examples of things auditors would test with reperformance | show 🗑
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| show | evaluations of financial information made by a study of plausible relationships among financial and non financial data
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| show | reviewing accounting data to identify significant or unusual items
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| show | inspection of tangible assets, reperformanc,e recalculation
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| show | observation, inquiry
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| type of audit evidence and assertion: trace from receiving reports to vendors' invoices and entry in the acquisitions journal | show 🗑
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| show | recalculation; valuation
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| type of audit evidence and assertion: examine expense voucher packages and related vendors' invoices for approval of expense account classification | show 🗑
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| show | observation; completeness
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| type of audit evidence and assertion: ask the accounts payable clerk about procedures for verifying prices, quantities, and extensions on vendors' invoices | show 🗑
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| show | inspection; occurrence/existence
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| show | companies are motivated to understate liabilities
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| show | companies are motivated to overstate assets
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| show | 1. provide support for the audit report
2. aid in planning, performance, and supervision of the audit
3. provide basis for quality reviews and evidence supporting auditors' significant conclusions
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| show | used to assist the auditor to better understand the business and to plan the nature, timing, and extent of audit procedures
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| show | used to obtain evidential matter about particular assertions related to account balances or classes of transactions
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| what is the purpose of final analytical procedures? | show 🗑
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| how do auditors develop an expectation when using analytical procedures? | show 🗑
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| how do auditors define tolerable difference | show 🗑
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| what is vouching? | show 🗑
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| show | selecting a source document and following it into the journal/ledger
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Created by:
graceatnyu