Audit book 2 Flashcards
How long should audit documentation be held for a nonissuer
5 years
How long should audit documentation be held for a issuer
7 years
Audit documentation serves what purpose
1 the principal support for the auditor’s report
2 assistance in the planning, conduct, and supervision of the audit
3 accountability
4 useful information
What are the factors that affect the nature and extent of audit documentation
1 The risk of material misstatement;
2 The extent to which judgment was required in performing the work and evaluating the results;
3 The nature of the specific auditing procedure;
4 The significance of the evidence obtained;
5 The nature and extent of any exceptions identified;
6 The need to document conclusions that may not be obvious.
7 The size and complexity of the entity; and
8 The audit methodology and tools used.
Internal Control - Integrated framework components
Control environment
risk assessment
information and communication
monitoring activates
(existing) control activates
Control environment - principles
Commitment to ethics and integrity
board independence and oversight
organization structure
commitment to competence
accountability
Risk assessment - principles
specify objectifies
identify and analyze risk
consider potential for fraud
identify and asses changes
Information and communication - principles
Obtain and use information
internally communicate information
communicate with external parties
Monitoring activates - principles
ongoing and or separate evaluations
communication of deficiencies
(existing) control activates - principles
select and develop control actives
select and develop technology controls
deployment of polices and procedures
What is an inherent risk
An inherent risk is the susceptibility that an error or omission
will occur in the financial statement due to a factor other than a failure of control
What is control risk
Control risk is the risk that a material misstatement that could occur
will not be prevented or detected on a timely basis
What is fraud
Fraud is any intentional act by someone involving the use of deception that results in a misstatement of financial statements
what is embezzlement
Embezzlement is the fraudulent taking of property by someone to whom it was entrusted
What is collusion
collusion required two or more individuals working together to commit fraud
