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13 Cards in this Set

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  • Back
alternative procedures
procedures used to obtain evidence about hte existence and valuation of accounts receivable when a positive confirmation is not returned, including examining cash collected after the confirmation date and vouching unpaid invoices to customer's orders, sales orders, shipping documents, and sales invoices
bill of lading
shipping document that describes items being shipped, the shipping terms, and delivery address; a formal legal document that conveys responsibility for the safety and shipment of items to the shipper
cutoff period
the few days just before and just after the balance sheet date; the number od days is chosen by the auditor, depending on the assessment of potential errors made in recording items in the incorrect period (especially sales and receivables)
cutoff tests
procedures applied to transactions selected from those recorded during the cutoff period to provide evidnece as to whether the transactions have been recorded in the proper period
a group of accounts related to a particular processing task; represents a convenient way to look at the interrelationship of account balances. normally, but not always, a transaction cycle encompasses all aspects of a transaction from its intiation to final disposition
differences between a customer's records and the client's records reported on positive or negative confirmations
a technique used to cover up the embezzlement of cash, whereby a cash collection from one customer is tolen by an employee who takes another customer's payment and credits the first customer. this process continues and at any point in time, at least one customer's account is overstated
negative confirmation
a request to customers asking them to respond directly to the auditor ONLY IF they disagree wit hthe indicated balance
positive confirmation
a request to customers asking them to respond directly to the auditor if they agree or disagree with the indicated balance
revenue cycle
the process of receiving a customer's order, approving credit for a sale, determining whether the goods are available for shipment, shipping the goods, billing the customers, collecting cash, and recognizing the effect of this process on other related accounts such as Accounts Receivable and Inventory
roll-forward period
the period between an interim date, when a substantive procedure was performed, and the balance sheet date
roll-forward procedures
procedures performed at or after the balance sheet date to update substantive evidence obtained at an interim date
timing difference
confirmation exceptions caused by transactions that are in process at the confirmation date, such as in-transit shipments or payments. these are not misstatements.