Chapter 7

Front 1

Analytical procedures

Back 1

evaluations of financial information through analysis of plausible relationships among financial and non-financial data

Front 2

Appropriateness of evidence

Back 2

a measure of the quality of evidence; appropriate evidence is relevant and reliable in meeting audit objectives for classes of transactions, account balances, and related disclosures

Front 3

Audit documentation

Back 3

record of the audit procedures performed, relevant audit evidence, and conclusions the auditor reached

Front 4

Audit procedure

Back 4

detailed instruction for the collection of a type of audit evidence

Front 5

Audit program

Back 5

list of audit procedures for an audit area or an entire audit, the audit program always includes audit procedures and may also include sample sizes, items to select, and timing of the tests

Front 6

Confirmation

Back 6

the auditor's receipt of a direct written or electronic response from a third party verifying the accuracy of information requested

Front 7

Current files

Back 7

all audit files applicable to the year under audit

Front 8

External document

Back 8

a document, such as a vendor's invoice, that has been used by an outside party to the transaction being documented and that the client now has or can easily obtain

Front 9

Inquiry

Back 9

the obtaining of written or oral information from the client in response to specific questions during the audit

Front 10

Inspection

Back 10

the auditor's examination of the client's documents and records to substantiate the information that is or should be included in the financial statements

Front 11

Internal document

Back 11

a document, such as an employee time report, that is prepared and used within the client's organization

Front 12

Lead schedule

Back 12

an audit schedule that contains the detailed accounts from the general ledger making up a line item total in the working trial balance

Front 13

Observation

Back 13

looking at a process or procedure being performed by others

Front 14

Permanent files

Back 14

auditors' files that contain data of a historical or continuing nature pertinent to the current audit such as copies of articles of incorporation, bylaws, bond indentures, and contracts

Front 15

Persuasiveness of evidence

Back 15

the degree to which the auditor is convinced that the evidence supports the audit opinion; the two determinants of persuasiveness are the appropriateness and sufficiency of the evidence

Front 16

Physical examination

Back 16

the auditor's inspection or count of a tangible asset

Front 17

Recalculation

Back 17

the rechecking of a sample of the computations made by the client, including mathematical accuracy of individual transactions and amounts and the adding of journals and subsidiary records

Front 18

Reliability of evidence

Back 18

the extent to which evidence is believable or worthy of thrust; evidence is reliable when it is obtained

(1) from an independent provider

(2) from a client with effective internal controls

(3) from the auditor's direct knowledge

(4) from qualified providers such as law firms and banks

(5) from objective sources

(6) in a timely manner

Front 19

Reperformance

Back 19

the auditor's independent tests of client accounting procedures or controls that were originally done as part of the entity's accounting and internal control system

Front 20

Sufficiency of evidence

Back 20

the quantity of evidence; proper sample size

Front 21

Supporting schedules

Back 21

detailed schedules prepared by the client or the auditor in support of specific amounts on the financial statements

Front 22

Tick marks

Back 22

symbols used on an audit schedule that provide additional information or details of audit procedures performed

Front 23

Tracing

Back 23

the use of documentation to determin if transactions or amounts are included in the accounting records

Front 24

Unusual fluctuations

Back 24

significant unexpected differences indicated by analytical procedures between the current year's audited financial data and other data used in comparisons

Front 25

Vouching

Back 25

the use of documentation to support recorded transactions or amounts

Front 26

Working trail balance

Back 26

a listing of the general ledger accounts and their year-end balances