AUD - GENERAL

Question 1

What are managements assertions?

Answer 1

U-PERCV

Understandability
Presentation and disclosure
Existence and Occurrence
Rights and obligations
Completeness and cutoff
Valuation and Allocation

Question 2

What are audit procedures?

Answer 2

Audit procedures = substantive tests
ICORRI-A

Inquiry
Confirmation
Observation
Recalculation
Reperformance
Inspection of tangibles
Inspection of books and records
Analytical Procedures

Question 3

What are analytical procedures?

Answer 3

Scanning numbers for reasonableness and calculating ratios
(comparisons)

CRAFT

Client vs. industry
Related accounts
Actual vs. budget
Financial vs. non-financial
This year vs. prior

Question 4

What are the 5 elements of an internal control structure

Answer 4

1. control environment
2. risk assessment
3. control activities
4. information and communication
5. monitoring

Question 5

What is an entity’s “accounting system”?

Answer 5

When obtaining an understanding of an entity’s “accounting system” the auditor must focus on:

1. significant classes of transactions
2. how these transactions are initiated
3. the accounting records and supporting documents involved in the processing of transactions
4. the processing involved from the initiation of a transaction to its inclusion in the financial statements
5. the process used to prepare the entity’s financial statements, including significant accounting estimates and disclosures.

Question 6

Will a report on an agreed-upon procedures engagement be restricted to specified parties?

Answer 6

Yes

Question 7

What is the purpose of analytical procedures performed in the review stage of an audit?

Answer 7

to evaluate the overall financial statement presentation and compare it to the auditor’s expectations as to financial position, results of operations, and cash flows

Question 8

What are advantages of PPS sampling?

Answer 8

Probability proportional to size:

1. a standard deviation is not needed
2. a sample is automatically stratified
3. a smaller sample will often result when few errors are expected
4. sampling can begin before the entire population is complete

Question 9

Can internal auditors help the independent auditor in substantive testing or in test of controls?

Answer 9

the internal auditors can assist the independent auditors in both