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20 Cards in this Set
- Front
- Back
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Analytical Procedures
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Use of comparisons and relationships to assess whether account balances or other data appear reasonable.
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Balance-related audit objectives
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8 objectives that have to be met before the auditor can conclude that any given account balance is fairly stated.
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8 Balance Related Audit Objectives
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Existence, Completeness, Accuracy, Classification, Cut off, Detail, Tie-in, Realizable value, rights and obligations
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Cycle Approach
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A method of dividing an audit by keeping closely related types of transactions and account balances in the same segment.
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Error
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An unintentional misstatement of the financial statements.
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Management Assertions
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Implied or expressed representations by management about classes of transactions, related account balances, and presentation and disclosures of the financial statements.
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Misappropriation of Assets
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A fraud involving the theft of an entity's assets.
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4 Phases of the Audit Plan
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Plan and Design and Audit Approach
Perform tests of controls and substantive tests of transactions. Perform analytical procedures and tests of details of balances Complete the audit and issue an audit report. |
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Presentation and Disclosure Related Audit Objectives
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Occurrence and rights and obligations , completeness, accuracy, and valuation, and classification and understandability.
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Relevant Assertions
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Whether an account is fairly stated and used to assess the risk of material misstatement
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Analytical Procedures
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Understand the clients industry and environment
Assess the entity's ability to continue as a going concern. Indicate the presence of possible misstatements in the financial statements. Reduce detailed audit tests. |
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Reperformance
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Independent test of accounting procedures or controls that were originally done.
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Types of Evidence
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Examine - Documentation
Scan- Analytical Procedures Read- Documentation Compute- Analytical procedures Recompute- Recalculation Foot- Documentation / Reperformance Trace- Documentation / Reperformance Compare- Documenation Count- Physical Examination Vouch- Documentation |
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Cost of Types of Evidence
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Most Expensive - Confirm and Examine
Moderate Cost- Documentation, Analytical procedures, and reperformance Least Expensive- Observation, inquiries, and recalculation. |
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Audit Documentation
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The principal record of auditing procedures applied, evidence obtained, and conclusions reached by the auditor in the engagement.
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Audit Documentation Facts
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3 Parts: Purposes of audit documentation, ownership of audi files, and confidentiality of audit files.
Must keep papers for public company for 7 years. Private - 5 years |
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Permanent Files
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Files intended to contain data of a historical or continuing nature pertinent to the current audit.
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Audit Program
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List of audit procedures for an audit area or an entire audit. Always includes audit procedures and may include sample sizes, items to select, and timing of the tests.
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Acceptable Audit Risk
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How willing the auditor is to accept that the financial statements are materially misstated after the audit is completed and an unqualified opinion has been issues.
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Inherent Risk
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A measure of the auditors assessment of the likihood that there are material misstatement in an account balance before considering the effectiveness of internal control.
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