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ACCTG 5510 > 9/23 Class > Flashcards

9/23 Class Flashcards

1
Q

Exam

A

review online 50-60 questions look at the multiple choice problems from class, study essential terms and review questions at the end of the chapter

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2
Q

introduction to audit preparation

A

on it

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3
Q

cycles

A 
receipts
sales and collections
payroll personell cycle
inventory and warehousing cycle
capital acquisition and repayment
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4
Q

managements responsibility

A

financial statements
internal controls
SOX - CEO & CFO Certification
Report of Management

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5
Q

auditors responsibilities

A 
perform audit of f/s(GAAS or PCAOB)
   material misstatements
   reasonable assurance
material weaknesses in internal control
Fraud
Misappropriation of assets
illegal acts
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6
Q

cycles

A 
sales & collection
acquisition & payment
payroll & presentation
inventory & warehousing
capital acquisition & repayment
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7
Q

acquisition & payment cycle

A 
balance sheet
   cash 
   current assets & liab
   fixed assets & accum depr
Income statement
   sales, general & admin exp
   inc taxes
   gains on sales of assets
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8
Q

payroll & personnel cycle

A 
balance sheet
   cash
   accrued payroll & related taxes
inc stmt
   salaries & commissions
   payroll taxes
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9
Q

Inventory & warehousing cycles

A

balance sheet
inventories & related allowances
Income statement
COGS

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10
Q

Capital Acquisition & Repayment Cycle

A 
Balance Sheet
   Cash 
   NP
   Long term liab
   accrued interest
   dividends payable
   stockholders equity
Inc stmt
   interest exp
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11
Q

selecting audit objectives

A 
balance sheet(ending balances)
   test debit balances for overstatement
   test credit balances for understatement
inc statement
   test debits for understatement
   test credits for overstatement
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12
Q

Sales & Collection Cycle

A 
Balance Sheet
   Cash 
   A/R
   Allowance for bad debts
Inc stmt
   sales 
   returns & allow
   bad debt exp
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13
Q

financial statement assertions

A

existence or occurrence
completeness
pg 156

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14
Q

existence or occurance

A

is it really there? Did it happen?

Direction FS - GL - Source Documents

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15
Q

completeness

A

did all items get recorded?

are all liabilities presented?

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16
Q

valuation - gross

A

is it really valued correctly?

Historical cost principle (GAAP)

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17
Q

valuation - net

A 
is it really worth what they say it is?
NRV, LCM
Impaired?
collectability
allowance - accounting est
   bad debts 
   inventory obsolescence
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18
Q

valuation accuracy

A

are quantities accurate?
are prices or costs accurate?
are extended values correct?
footing errors?

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19
Q

cutoff

A

are all items for the period end included?
are there out of period items included?
did the records cut off at 12:00 midnight exactly on Dec 31, 2010?

20
Q

rights and obligations

A

does the company have the rights to the assets?

Does the company have an obligation for a liability not presented?

21
Q

rights & obligations

A 
is there an unrecorded liability ?
   commitment
   agreement/arrangement
   guarantee
The company claims the rights to a whole warehouse of inventory.
22
Q

presentation & disclosure

A

adequacy of disclosure
per GAAP
Classification of accounts

23
Q

Audit Decisions

A

procedures to use
sample size
method of selection from population
timing of procedures

24
Q

sufficient, appropriate evidential matter

A 
sufficiency - quantity
appropriate - quality
   believable
   independent
   reliable
   relevant
inverse relationship
25
Q

appropriateness affected by

A 
relevance related to audit objective-direction
reliability
   independent sources
   effective internal control 
   direct evidence obtained
   individual qualifications
   objectivity 
   timeliness
26
Q

types of audit evidence

A 
physical examination
confirmation
inspection
analytic procedures
inquiries of client
reperformance/recalcualtion
observation
27
Q

types of evidence

A 
direct physical examination
   observe inventory procedures
   examine assets
Confirmation
   third party representatives
   confirmation
   attorney letters
28
Q

information confirmed pg 201/181

A

know it

29
Q
  1. inspection
A 
vouching - gl to client docs existence
tracing - source docs to f/s completeness
within company - customer invoice
outside company - vendor invoice
electronic documents - paperless
be careful - faxes, photo copies, drafts
30
Q
  1. analytical procedures
A

data interrelationships

31
Q
  1. inquiry and written client representations
A

helps get things started

32
Q
  1. Re-performance/Recalculation
A

yes

33
Q
  1. Observation
A

learn them

34
Q

audit procedures/audit program

A 
materiality
nature of procedures
timing of procedures
extent of procedures
cost benefit relationship
   most expensive?physical , confirmation
   least expensive?
35
Q

analytical procedures

A 
required in the planning and performing of the audit
plausible relationships
financial and non-financial data
nature of analytical procedures
   develop expectation 
   perform procedures
   expectation vs actual 
   investigate
   assess explanation
   conclude or dig further
36
Q

types of procedures

A 
industry data
prior period data
client expectations
auditor expectations
non-financial data
purpose?
37
Q

timing

A

during planning - required
substantive testing
overall concluding review - required
never used to test internal controls

38
Q

extent of analytical procedures

A 
depends on effectiveness
   precision
   predictability
   technique
   reliability of data
39
Q

evidence on accounting estimates

A 
ex: allowances, contingencies
review management rationale
auditor estimate
compare
inquiry experts or independent parties
corroborating evidence
   subsequent events
conclude
40
Q

evidence on related party transactions

A 
related party - any affiliates
   officer
   directors
   principal owners/shareholders
   immediate families of above
   affiliates
review significant transactions
   disclose
   consolidate?
41
Q

working papers

A 
assigning and coordinating
supervising and review
supporting GAAS
Stand alone
Subsequent audit value
Ownership
Access
42
Q

current file

A

planning
overall audit program
internal control documentation of understanding
engagement letters, times budgets, correspondence
working trial balance - by lead schedules
client financial statements (cross referenced)
AJE’s, RJE’s, Passed AJE’s
Management representation letter

43
Q

content of working papers

A 
current file
   audit programs for each account
   procedures/plan
   documentation
   conclusions
permanent file
   articles of incorporation
   bylaws
   contracts
   other agreements
other year to year data
44
Q

prep of working papers

A 
headings
PBC
Date/Signature of preparer and reviewer
cross ref work papers
tickmarks and legend
explanation of procedures
conclusions
45
Q

review of working papers

A 
reviewers
   senior
   manager
   engagement partner
   concurring review(Impartial)
   Technical Reviewer
Review Notes

ACCTG 5510 (29 decks)

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