Audit 2

Question 1

In the understanding with the client, the auditor:

Answer 1

Should make clear that any deficiencies in internal control will be reported to those charged with governance

Question 2

Whats the objective of analytical procedures?

Answer 2

Unusual events and transactions

Question 3

For what can an external auditor rely on internal auditor?

Answer 3

For certain tasks under the direction of the auditor, but all responsibility is on the external auditor

Question 4

What should be included in an engagement quality review?

Answer 4

Identify the reviewer and others who assisted, the documents reviewed, and the date of the issuance

Question 5

If predecessor auditor is a jerk:

Answer 5

Review risk assessment of opening balances

Question 6

If management is a jerk regarding previous audit docs :

Answer 6

WITHDRAW

Question 7

Analytical Procedures are ALWAYS required in Audit

Answer 7

!

Question 8

Materiality:

Answer 8

Alters the mix

Question 9

Walkthrough Procedures are:

Answer 9

Inquiry, Observation, Inspection of Docs, Reperformance of controls

Question 10

Quality control of a Cpa firm is:

Answer 10

HR dept., Ethics, Client Relationship, depends on nature of firm, how big, and cost benefit

Question 11

When IT is used extensively, what do you do?

Answer 11

Use generalized Audit software to extract data from client

Question 12

What constitutes a specialist?

Answer 12

Someone outside of accounting or auditing

Question 13

Audit Documentation is:

Answer 13

The bridge between accounting records and FS

Question 14

A working trial balance contains columns for what?

Answer 14

Reclassification and Adjustments

Question 15

Preliminary judgement about materiality involves?

Answer 15

Looking at prior year FS

Question 16

Analytical Procedures during planning involves?

Answer 16

High level Aggregated Data

Question 17

Predecessor/Successor?

Answer 17

Letters both ways, Communication both beofre and after engagement

Question 18

Test Data?

Answer 18

Auditor’s input data on the client’s system, off-line.

Question 19

Integrated Test Facility

Answer 19

Auditor’s input data on the client’s system, on-line.

Question 20

Parallel Simulation

Answer 20

Auditor reprocesses the client’s data using the auditor’s own software

Question 21

What should be communicated to the client during planning?

Answer 21

Timing