A4 Flashcards
corroborated
confirm or give support to a statement, theory, or finding.
Completeness
From source document to accounting records
The standard confirmation request to bancks seeks
information on contingent liabilities and security agreements in addition to information related to deposit account balances.
standard confirmation request to financial institutions
is to corroborate information regarding deposit and loan balances.
Embezzlement
occurs when a criminal takes or uses money from a company or an agency without consent
Existence under inventory
From company inventory to cpa
Completeness under inventory
from cpa report to company inventory
The purpose of the management representation letter is to
confirm management’s oral evidence supplied during the engagement.
The audit committee
is considered a subgroup of the board of directors ordinarily charged with assisting the board of directors in fulfilling its oversight responsibilities.
Senior management
assists the board of directors with the day-to-day activities of the business.
(Not a subgroup of the board fo directors)
All material weaknesses are
significant deficiencies.
An auditor’s program to examine long-term debt should include steps that require:
Examining bond trust indentures.
An auditor should trace corporate stock issuances and treasury stock transactions to the:
Minutes of the board of directors.
Prior year unrecorded immaterial misstatements affect
Current year as well
Representation letters should be signed by
The CEO/President and the CFO
what are substantive analytical procedures
Those that involve auditors coming up with their own estimates/expectations and comparing them to management
Test of details
When an auditor looks at the details of a transaction for example a supporting document
What is the SEC verdict on audit committees
They are encouraged but not required
As an auditor we do not want to give management or those charged with governance information on
High-risk audit procedures or details of what procedures we will be performing because this might allow management to better prepare for those procedures
What is the audit committee
a subgroup ordinarily charged with assisting the board of directors in fulfilling its oversight responsibilities.
What should not be included in audit documentation when in relation with the going concern
Mitigating factors considered insignificant.
Tracing shipping documents to entries in the sales journal provides evidence that:
Shipments to customers were properly recorded.
In which situations should disagreements with management and significant audit adjustments be communicated to those charged with governance?
Disagreements should be communicated even if resolved
significant audit adjustments should be communicated even if adjustment has been booked
An auditor selects a sample from the files of invoices to determine if shipping documents were prepared. This test is performed to support management’s financial statement assertion of:
Existence
