Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
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 |