Audit Module 4

Front 1

What are the different transaction cycles?

Back 1

1) Revenue
2) Expenditure
3) Payroll & Personnel
4) Inventory & Production
5) Property, Plant & Equipment
6) Investments
7) Other Liabilities

Hint 1

There are 7

Front 2

Would following TOC procedure would be a test over SALES or COLLECTIONS?

"Vouch a sample of sales invoices to shipping documents and approved sales orders"

Back 2

SALES

Front 3

Would following TOC procedure would be a test over SALES or COLLECTIONS?

"Observe mailing of monthly customer statements"

Back 3

SALES

Front 4

Would following TOC procedure would be a test over SALES or COLLECTIONS?

"Inspect deposit slip and compare to cash summary"

Back 4

COLLECTIONS

Front 5

Would following TOC procedure would be a test over SALES or COLLECTIONS?

"Observe the matching of remittance advices and check deposit summary"

Back 5

COLLECTIONS

Front 6

Would following TOC procedure would be a test over PURCHASES or PAYABLES?

"Inspect purchase orders for approved requisition"

Back 6

Purchases

Front 7

True or False:

Auditing Standards require the final audit documentation to be assembled within 45 days following the report release date.

Back 7

FALSE

*must be assembled within 60 days.

Front 8

True or False:

The PCAOB require the final audit documentation to be assembled within 45 days following the report release date.

Back 8

TRUE

Front 9

Is audit documentation property of the independent auditor or the client?

Back 9

Independent auditor

Front 10

In determining the nature and extent of audit documentation, the auditor should considere the following:

Back 10

1) Risk of material misstatement
2) Extent to which judgement was required in performing the work and evaluating the results
3) Nature of the specific auditing procedure
4) Significance of the evidence obtained
5) Nature & extent of any problems identified
6) The need to document conclusions that may not be obvious

Hint 10

There are 6

Front 11

Is the following included in the permanent file or the current year file?

Copies of stock options

Back 11

PERMANENT FILE

Front 12

Is the following included in the permanent file or the current year file?

Confirmation Letters

Back 12

CURRENT YEAR FILE

Front 13

Is the following included in the permanent file or the current year file?

Summaries of signficant audit findings

Back 13

CURRENT YEAR FILE

Front 14

Is the following included in the permanent file or the current year file?

Copies of Leases

Back 14

PERMANENT FILE

Front 15

Is the following included in the permanent file or the current year file?

Accounts Receivable Aging

Back 15

CURRENT YEAR FILE

Front 16

Is the following included in the permanent file or the current year file?

Copies of Bylaws and Articles of Incorporation

Back 16

PERMANENT FILE

Front 17

Audit documentation can be provided wihtout the client's permission under what three situations?

Back 17

1) Part of a voluntary quality review program under the auspices of the AICPA or state society of CPAs
2) If its subpoenaed by a court
3) If its needed as part of an official investigation being conducted by the AICPA, a state CPA society, or under state statues

Front 18

True or False:

Analytical Procedures are required in the planning stage of the audit.

Back 18

TRUE

Front 19

True or False:

Analytical Procedures are required in the substantive testing stage of the audit.

Back 19

FALSE

Front 20

True or False:

Analytical Procedures are required in the final stage of the audit.

Back 20

TRUE

Front 21

List the standard auditing procedures

Back 21

1) Foot, Crossfoot, Recalc
2) Inquiry
3) Vouching
4) Examination/Inspection
5) Confirmation
6) Analytical Procedurs
7) Reperformance
8) Reconciliation
9) Observation
10) Tracing
11) Subsequent Events Review

Hint 21

FIVE CARROTS

Front 22

The following procedure tests which assertion?

Examine the last five sales invoices of the year.

Back 22

Cut-off

Front 23

The following procedure tests which assertion?

Confirmation of accounts with third parties

Back 23

Existence

Front 24

The following procedure tests which assertion?

Perform inventory observation

Back 24

Existence

Front 25

The following procedure tests which assertion?

Trace an invoice to the accounts payable aging.

Back 25

Completeness

Front 26

The following procedure tests which assertion?

Inspection of contracts/debt agreements

Back 26

Rights & Obligations

Front 27

The following procedure tests which assertion?

Review of all disclosures for compliance with GAAP

Back 27

Understandability and Classification

Front 28

The following procedure tests which assertion?

Recalculation of allowance for doubtful accounts for reasonableness.

Back 28

Allocation & Valuation