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24 Cards in this Set

  • Front
  • Back

Internal controls

1. Control Environment


2. Risk Assessment


3. Information and Communication


4. Monitoring


5. Control Activities


Financial statements materially mistated

Adverse opinion

Inability to obtain sufficient audit evidence


Disclaimer of opinion

PCAOB auditing Standards

Basis for Opinion

GAAP- or other financial reporting formula

Opinion on financial statement section

Emphasis-of-matter required when:

1. Going concern


2. Accounting principle change


3. Subsequent facts led to chance


4. Prepared special purpose financial statements

Uncertainties

Loss probable- accrue and disclose


Reasonable possible- disclose


Remote- no disclose

Financial Statement Assertions

COVERU


1. Completeness


2. Cutoff


3. Valuation, allocation


4. Existence


5. Rights and obligations


6. Understandability and classification

Quality Control Firm

1. Human Resources


2. Engagement/client acceptance


3. Leadership


4. Performance


5. Monitoring


6. Ethical requirements


HELPME

Upper deviation Rate

Sample dev rate + allowance for sample= upper deviation rate up

Upper deviation rate less than tolerable

Upper deviation

Internal control responsibility

Auditor should understand design and implementation

Auditing plant property equipment

Repairs shouldn’t be capitalized

Payroll audit

Payroll record keeper, but don’t have authority to change rates or ability to sign checks

Management representation letter

Management representation letter should indicate discourse of claims and litigation

Types of internal control of company

PAID TIPS


1. Prenumbering


2. Authorization


3. Independent checks


4. Documentation


5. Timely performance reviews


6. Information process


7. Physical control


8. Segregation of duty

Segregation of duties

ARC


1. Authorization


2. Record keeping


3. Custody of related assets

Auditor documentation of internal control

FIND


1. Flowchart


2. Internal control


3. Narrative


4. Documentation

Audit evidence hierarchy

1. Auditors direct personal knowledge


2. External evidence


3. Internal evidence


4. Oral evidence

Audit Procedures

Five carrot wars


1. Confirmation


2. Footing


3. Inquiry


4. Vouching


5. Examination


6. Cutoff review


7. Analytical procedures


8. Reperformance


9. Reconciliation


10. Observation


11. Tracing


12. Walk through

Direction of audit evidence

1. Financial statement>source documentation (existence)


2. Source documentation>financial statement (completeness)

Account balance assertions audit

1. Completeness


2. Valuation


3. Existence


4. Rights


Asset balances generally test completeness

Transaction balances auditing

1. Completeness


2. Cutoff


3. Valuation


4. Existence


5. Understandability


Revenue transactions generally existence

Accounts payable assertion auditing

Understated test for completeness and accuracy