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35 Cards in this Set
- Front
- Back
Auditing |
Accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria |
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Evidence |
Amy information used by the auditor to determine whether the information being audited is stated in accordance with established criteria |
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Audit report |
Communicated auditors findings to users |
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Assurance services |
Independent, professional services that improve the quality of information for decision makers |
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PCAOB |
Created by SOX - oversees auditors of PUBLIC companies |
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AICPA |
Organization of CPAs - governs auditing of PRIVATE companies |
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SEC |
Federal agency that assists in providing investors with reliable information |
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standard unqualified audit report |
Issued when all auditing conditions have been met, no significant misstatements have been discovered and left uncorrected, and auditors opinion is that fin stmts are fairly stated |
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Unqualified report with explanatory paragraph or modified wording |
Unqualified report where fin stmts are fairly presented but auditor believes it important or required to provide additional information |
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Explanatory paragraph |
Caused by non use of GAAP, substantial doubt about going concern, auditor adhering with departure from principle, or emphasis of other matters |
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Modified wording |
Used in report when they involve other auditors |
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Qualified opinion |
Report issued when auditor believes that overall fin stmts are fairly stated but either scope was limited or financial data indicated failures to follow GAAP |
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Adverse opinion |
Report issued when auditor believes fin stmts are so materially misstated or misleading as a whole that they do not present the financial position our the results of its operations - uncommon, rarely used |
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Disclaimer of opinion |
Report issued when auditor is not able to become satisfied that overall financial statements are fairly presented or auditor is not independent |
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Analytical procedures |
Evaluations of financial information through analysis of plausible relationships among financial and non financial data |
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BRAOs |
8 audit objectives that must be met before auditor can conclude that any given account balance is fairly stated |
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BRAOs |
Existence, Completeness, Accuracy, Classification, Cutoff, Detail tie-in, Realizable value, rights and obligations |
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Phases of Audit Process |
1. Plan and design audit approach 2. Perform tests of controls and substantive tests of transactions 3. Perform analytical procedures and tests of details and balances 4. Complete audit and issue report |
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Substantive tests of transactions |
Audit procedures testing for monetary misstatements to determine whether the six TRAOs have been satisfied for each class of transaction |
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Tests of controls |
Audit procedures to test the effectiveness of controls in support of a reduced assessed control risk - TRAOs |
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Tests of details of balances |
Audit procedures testing for monetary misstatements to determine whether the eight BRAOs have been satisfied for each significant account balance |
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TRAOs |
6 audit objectives that must be met before the auditor can conclude that the total for any given class of transactions is fairly stated |
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TRAOs |
Occurrence, Completeness, Accuracy, Classification, Timing, Posting and summarization |
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Presentation and disclosure related audit objectives |
Four audit objectives that must be met before auditor can conclude that presentation and disclosure are fairly stated - Occurence and rights and obligations, Completeness, Accuracy and valuation, Classification and understandability |
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TRAO - Occurrence |
Whether recorded transactions have actually occurred - from sales journal to shipping document |
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TRAO - Completeness |
Whether all transactions that should be included in journals have been included |
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TRAO - Accuracy |
Recorded transactions are stated at the correct amounts |
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TRAO - Posting and Summarization |
Recorded transactions are properly included in the master files |
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TRAO - Classification |
Whether transactions are included in the appropriate accounts |
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TRAO - Timing |
Transactions are recorded on correct dates - sales transaction is recorded on date of shipment |
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BRAO - Existence |
Amounts included exist - looking at whats on paper and comparing to the physical |
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BRAO - Completeness |
Existing amounts are included - looking at physical and comparing to paper |
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BRAO - Cutoff |
Transactions near the balance sheet date are recorded in the proper period |
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BRAO - Detail tie-in |
Details in account balance agree with related general ledger |
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BRAO - Realizable value |
Whether account balances are included at amounts estimated to be realized |