A3 Flashcards

1
Q

seeking of information that is done by management

A

inquiry

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2
Q

assesses risk of material misstatement, and determines nature, extent, and timing of audit procedures

A

analytical procedures

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3
Q

occurs when margins revenue is equal to marginal cost

A

profit maximization

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4
Q

growth, rising economic activity, profits, lower unemployment

A

expansionary phase

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5
Q

falling economic activity

A

contractionary phase

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6
Q

predict economic activity

A

leading indicator

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7
Q

tatistical indicators that usually change simultaneously with general economic conditions

A

coincidentent indicator

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8
Q

tend to follow economic activity

A

lagging indicators

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9
Q

quantity to which audit is performed

A

extent

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10
Q

method to prevent misstatement

A

substantive approach

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11
Q

uses control and details

A

combined approach

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12
Q

test of controls is used when

A

-auditor’s risk assessment i s based on assumption they are effective

-substantive procedures are insufficient

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13
Q

used to gather evidence to support account balances in FS

A

test of details

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14
Q

study of plausible relationships in financial and non financial data

A

substantive analytical procedures

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15
Q

date that increases risk auditor won’t detect material misstatements

A

interim date

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16
Q

identified high risk of fraud risk of material misstatement

A

period end

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17
Q

based on auditor’s judgment

A

sufficiency

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18
Q

obtain representation from external third parties

A

confirmation

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19
Q

examines support for what’s been recorded

A

vouching

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20
Q

review of year-end transactions, especially inventory, cash, purchases, sales, and accruals

A

cutoff

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21
Q

provides assurance event is being given proper recognition in books+ records

A

tracing

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22
Q

procedures performed after balance sheet date to date of auditor’s report

A

subsequent events review

23
Q

what are the substantive procedures?

A

tests of details and substantive analytical procedures

24
Q

evidence obtained through 3rd party

A

external confirmation

25
Q

used to measure numerical measurement of population

A

variables sampling

26
Q

maximum monetary misstatement auditor will accept

A

tolerable misstatement

27
Q

population has highly variable recorded amounts

A

stratification

28
Q

three types of classical variables sampling

A

mean per unit, ratio estimation, difference estimation

29
Q

Advantags of PPS sampling

A

stratisfies sample, requires smaller sample

30
Q

formula for sampling interval

A

tolerable misstatement/ reliability factor

31
Q

sample size formula

A

recorded amount of population/ sampling interval

32
Q

hierarchy of audit evidence

A
  1. Auditor’s direct personal knowledge
  2. External evidence
  3. Internal evidence
  4. Oral evidence
33
Q

PCOAB audit evidence depends on

A

Design of audit procedure
Timing of audit procedure

34
Q

provides additional support, gives validity to recorded data

A

corroborating evidence

35
Q

obtained from independent sources outside+ provides greater reliability

A

external evidence

36
Q

creates charts, graphs, diagrams, and dashboards to help emphasize trends and relationships

A

data visualization

37
Q

explain what happened, what is happening

A

descriptive analytics

38
Q

understand underlying cause of result of why something happened

A

diagnostic analytics

39
Q

uses historical data/ facts to make predictions

A

predictive analytics

40
Q

most advanced and complex analytic

A

prescriptive analytics

41
Q

what to evaluate in ADA

A

quantitative data, qualitative data, date and time data, geographic

42
Q

allows auditor to evaluate relationships between variables

A

regression analysis

43
Q

compare company’s forecasted or budgeted values against actual values

A

variable analysis

44
Q

used to develop expectation of future results

A

trend analysis

45
Q

attributes that contain primary key from another table

A

foreign key

46
Q

required attribute in every table that contains unique identifier

A

primary key

47
Q

designed to provide reasonable assurance of valid transactions

A

preventative controls

48
Q

errors or irregularities are discovered and corrected on timely basis

A

detective controls

49
Q

large, unusual, or nonrecurring transactions

A

Manual Controls

50
Q

high volume and recurring transactions

A

Automated Controls

51
Q

Support effective functioning and authorization of internal controls

A

General Controls

52
Q

Help ensure transactions occurred and are authorized

A

Information processing controls

53
Q

Implementation procedures

A
  1. Inquiry of entity personnel
  2. Observation
  3. Inspection
  4. Reperforming
54
Q

Types of Documentation (FIND)

A

Flowchart, Internal Control Questionnaire, Narrative, Documentation