Analytical procedures SIM

Question 1

Analytics Sim: read instructions for rounding and dollar amounts

Answer 1

Think about the reliability of the data and whether more work is necessary

Question 2

While evaluating inherent risk auditor will be more concern:

Answer 2

That revenues and expenses will be manipulated to bolster net income: overstatement. More complicated transactions = higher the risk. No impact if only touched the balance sheet

Question 3

Ratios SIM

Answer 3

1.Consider which way the account is going + -
2.Know the formula
for a ratio to go up even the denominator increase or the numerator decrease
for a ratio to go down the denominator decrease or the numerator increase or both

Question 4

Cut off testing (adjusting entry)

Answer 4

Know the adjusting entries

Question 5

Search for unrecorded liabilities

Answer 5

Be pending for the materiality/scope