A4 Flashcards
when detecting misstatements what should auditor consider?
nature, time, size to an extent
What do misstatements have to be supported with along with additional evidence
Inquiries
who signs management representation letter?
CFO
what factors do materiality limits affect?
disclosure, recognition, and measurement
what are some purposes of the management representation letter
confirm management’s oral evidence and prevent misunderstanding
conditions of significant deficiencies of material weakness
purpose, definition, restriction
person in control doesn’t have authority or skill to perform control
deficiency in operation
failure to act even when controls are operated as designed
deficiency in design
all material weaknesses are
significant deficiencies
what needs to be discussed with governance
disagreements with management
what represents a significant internal control deficiency
lack of objectivity
what needs to occur to allow with reviewing when recording retirements over equipment
inspection
what are payroll procedures?
- Voucher from amount in payroll is prepared by accounting
- payroll checks prepared by payroll, signed by treasurer
- Personnel department sends termination to payroll
what is performed when control risk is low
analytical procedures and recalculation
what is primary responsibility of bank regarding stocks?
verify stock has proper authorization
what responsibility does management assume in internal control?
design implementation, and maintenance
what assertion involves tracing
completeness
company has ownership and usage claims
rights, obligations, and occurrence
ensures recorded amounts are proper and correct
valuation, allocation, and accuracy
in what assertion would an auditor send confirmation to 3rd party brokers
existence
test weather transactions are recorded in proper period
cutoff
