72% Flashcards
a nonissuer uses FIFO for its international subsidiary while LIFO for domestic inventory. what type of opinion should the auditor express?
unmodified
when would a group engagement partner reference the work of a component auditor?
when the component auditor’s work is unable to be reviewed
what is the auditor’s responsibility for supplementary information?
apply limited procedures
add other matter paragraph
where would an auditor’s responsibilities and limitations of an engagement be found in the working papers?
engagement letter
what are audit objectives based on?
assertions
why might an auditor consider the methods used to process accounting information?
to understand the design of internal control
when might an auditor refer to a specialist (including SOCs) in an audit report?
when the specialist’s findings causes the auditor to issue a modified opinion
why should the auditor consider the timing of control and substantive testing if electronic evidence is retrievable after a specific period?
data may not be available to be tested
what should an auditor do if their client recently implemented a new accounting system?
revise audit program
why is audit evidence not obtained when determining sample size?
determining sample size will prompt an auditor to gather audit evidence
in the revenue cycle, who has
credit granting
authorization of write offs
recording the books
credit dept
treasurer
AR dept
what is kiting?
when transfer of money between a client’s bank accounts are transferred and posted on different dates
what is lapping?
when a cash collection is applied to the incorrect customer’s account
how can dividend income be corroborated?
dividend records produced by investment services
which entity-level controls are specifically mentioned in the professional standards?
period end financial reporting controls
control environment
