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28 Cards in this Set
- Front
- Back
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enagagement risk
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risk of financial or reputational loss because of association with client; litigation
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client business risk
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risk of decline in clients business
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inherent risk
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built in risk; driven by industry
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control risk
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risk misstatement not prevented or detected by controls
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detection risk
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risk that auditor failed to detect a MM
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inherent risk x control risk x detection risk
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Acceptable Audit Risk Model
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RMM
Risk of Material Missatement |
inherent risk x control risk
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lying
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misreperesentation
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theft, larcent
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misappropriation
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nature
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use better test for higher risk
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extent
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use more items for higher risk
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timing
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early for low; later for high
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occurance / existence
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legitamacy issue (whole entry)
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occrance / existence
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transactions that have been recorded have occured
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completeness
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all that should have been recorded was recorded (none left out)
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authorization
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price, terms. credit worthiness
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accuracy / valuation and allocation
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amount and other data has been recorded appropriately
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classification
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transactions in proper accounts
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completeness
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agreeing AR to AP
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existence or valuation
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sending request to customers for amoutn owed
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valuation
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adequacy of allowance for doubtful accounts
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existence
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watching personell count inventory
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completeness or existence
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performing test counts of inventory
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existence
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vouching
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completeness
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tracing
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vouching
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test of controls and substantive tests are vouching
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trens ratio analysis
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multiple f/s items for an analytical test
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reasonableness
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1 account balance for an analytical test
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