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11 Cards in this Set
- Front
- Back
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What are the 3 main reasons for audit planning
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1) to obtain sufficient competent evidence for the circumstances (minimizes legal liability, Maintains a good reputation)
2) to help keep audit costs reasonable 3) To avoid misunderstanding with the client |
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Assessing acceptable audit risk and Inherent risk lead to what
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the determination of the amount of evidence that will be collected
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What 3 factors have increased the importance of understanding the clients business and industry
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Information technology
Global operations Human capital |
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What are three good reasons to understand a clients industry and external environment
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1) risks associated with specific industries
2) Inherent risks common to all clients in certain industries 3) Unique accounting requirements |
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What are clients strategies
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They are approaches followed by the entity to achieve organizational objectives
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Auditors should understand clients objectives, such as
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Financial reporting reliability
Effectiveness and efficiency of operations Compliance with laws and regulations |
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What is the auditors primary concern, related to business risk
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Material misstatements in the financial statements due to client business risk
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what can preliminary test help to reveal
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Unusual changes in ratios
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When are analytical procedures required, which phases
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Required in planning and completion phase but are often done during the testing phase
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What are 5 types of analytical procedures
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1) Industry data
2) Similiar period data 3) Client-determined expected results 4) Auditor-determined expected results 5) Expected results using nonfinancial data |
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What does SAS 56 emphasize
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The expectations developed by the auditor
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