A3 - Planning and Supervision

Question 1

What are the six financial statement assertions?

Answer 1

COVERU
Completeness
CutOff
Valuation, allocation and accuracy
Existence and occurrence
Rights and obligations
Understandability and classification

Question 2

T/F: The work of a management specialist who has a contractual relationship with the client may be acceptable under certain circumstances

Answer 2

True

Question 3

On which document (or set of documents) is preliminary materiality based?

Answer 3

Annualized interim (or most recent annual) financial statements

Question 4

Internal auditor = no judgement

Answer 4

Internal auditor = no judgement

Question 5

A decrease in the amount of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to do what?

Answer 5

Move the planned auditing procedures closer to the balance sheet date

Question 6

Under what circumstances is it allowable for the auditor to reference an specialist?

Answer 6

If the auditor modifies the report as a result of the client’s and specialist’s disagreement of valuation