A4 Flashcards
Least thing will be done when not confirmation reply is received for AR
Increase the assessed level of detection risk for valuation assertion
Review of AR gaining to support MNGMT’s FS assertion of..?
Valuation & Allocation
Negative confirmations provide __________ persuasive audit evidence than positive confirmations.
LESS
Negative confirmations should be used if there is ______ exception rate is expected
LOW
en estas only requires response if there is a discrepancy
When auditor’s combined assessment of control risk and inherit risk is low… auditor should issue what type of confirmation?
POSITIVE
en esta los campos estan llenos y cliente tiene que confirmar que esta deacurdo
When recipients are likely to sign confirmations w/o careful investigation… Auditor should send a…
Blank confirmation
Si comunmente no se fijan es mejor mandar una blank pq asi ellos tienen que detenerse y lelnar los campos vacios.
Write-offs should be approved by what DPT?
Treasury
External confirmation Factor
Factor for an auditor to consider when designing confirmation request is the assertion being tested
i.e. si estas probando presentation no tiene caso pero si estas haciendo Complentess sSI
Auditors TOC for completeness in revenue cycle usually include?
An invoice is prepared for e/ shipping Doc
Shipping documents provide evidence that ….
Sale Occured
Significant debits to accumulated depreciation =
Assets were retired
Risk assessed as low for assertions related to payroll-> substantive test of payroll balance would be limited to …
applying analytical procedures & “Recalculating payroll accruals”
AR Confirmation rarely provides reliable evidence about completeness assertion b/c
Customers may not be inclined to report understatement errors in their account.
Inventory completeness assertion best tested via
Cut-off
Auditing retained earnings … assertion
Understandability of presentation & classification
TOC most likely would help assure that goods shipped are properly billed?
Examine shipping documents for matching sales invoices
Bill=invoice
When client will NOT permit inquiry w/Legal counsel .. Auditor report Opinion =
Disclaimer … treat the inquiry as document support (GAAS) b/s it is a SCOPE LIMITATION
Key factors & assumptions in evaluating the reasonableness of an accounting estimate :
1) significant to the acct estimate
2) sensitive to variations
3) deviations from historical
4)subjective & susceptible to misstatements and bias.
Upon receipt of customer check in mailroom… employee prepare remittance listing is forwarded to cashier &
Accounts receivable bookkeeper to update the subsidiary AR records.
ALL material weakness are significant decifiencies
materia es defecar
tosa la materia esta incluida cuando defecas
Reviewing credit ratings of customers w/delinquent AR refers to what type of assertion
Valuation & Allocation
Auditor most likely to identify “contingent liabilities” in a “Standard bank confirmation” because….
Contingent Liabilities can be shown in the “exceptions & comments box “ in a Standard bank confirmations
Por otro lado AP no es pq those are existing Liab not “contingent”
When reporting on entity’s IC … Auditor should
restrict the use of the report
Cashier receives remittance from the mailroom… should also prepare?
Daily deposit slips
