Chapter 1 LO1 Flashcards
describe auditing
an auditor must have an _____ mental attidute?
independent
auditors must determine the _____ and ____ of evidence necessary
type amount
_____ is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria
Auditing
To do an audit , information must be in what kind of form
a verifiable form
Auditing is the accumulation and ____ of evidence about information to determine and report on the degree of correspondence between the information and established criteria
evaluation
T/F the criteria for evaluating info doesn’t vary depending on the info being audited
F
Evidence is any ____ used by the auditor to determine whether the info being audited is stated in accordance with established criteria
info
Auditing is the accumulation and evaluation of evidence about information to ____ and report on the degree of correspondence between the information and established criteria
determine
to satisfy purpose of the audit, auditors must obtain a sufficient ____ and _____ of evidence
quality quantitiy
what are some examples of how an auditor performs audits of quantifiable info. what is this quantifiable info? (2)
- financial statement 2. individual federal income tax return
what are some examples of subjective info that an auditor might audit (2)
- effectiveness of computer systems 2. efficiency of manufacturing operation
to do an audit there must be information in a verifiable form and some standards or criteria by which the auditor can do what?
evaluate the info
Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the _____ and established criteria
information
T/F reports dont vary in form
F can be highy technical like finanical statement audits or can be simple oral report like an operational audit of small departments effectiveness
Evidence is any info used by the auditor to determine whether the info being audited is stated in accordance with established ____
criteria
to do an audit information must be in a verifiable form and there should be some what ? by which the auditor can evaluate the information
standards (criteria)
Evidence is any info used by the auditor to ____whether the info being audited is stated in accordance with established criteria
determine
what would be the criteria for auditing internal control over finanical reporting
the framework for establishing internal control like like Internal Control- Integrated Framework issued by COSO
_____ is any info used by the auditor to determine whether the info being audited is stated in accordance with established criteria
Evidence
Auditing is the accumulation and evaluation of evidence about information to determine and report on the ____ of correspondence between the information and established criteria
degree
what is the final statge in the auditing process?
the audit report
T/F for subjective info, it is more difficult to establish criteria
T
T/F auditors can also audit more subjective info
T
Evidence is any info used by the auditor to determine whether the ____ being audited is stated in accordance with established criteria
info
audit reports differ in nature, but all must inform readers of what?
the degree of correspondence between the info audited and established criteria (tax return and Internal revenue code)
Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established _____
criteria
the auditor must be qualified to understand the criteria used and competent to know the the types and amount of evidence to accumulate in order to do what?
reach the proper conclusion after examining the evidence
what would the criteria be for audit of tax returns by IRS?
Internal Revenue code
Evidence is any info used by the auditor to determine whether the info being audited is stated in accordance with ____ criteria
established
What is COSO?
Committee of sponsoring organizations of the treadway commision
T/f even though auditors are paid fees by the company, they are normally sufficiently independent to conduct audits that can be relied on by user
T
Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and _____ criteria
established
Evidence is any info used by the auditor to determine whether the info being audited is stated in ____ with established criteria
accordance
what does the audit report do?
communicates the auditors findings to users
auditors reporting on company financial statments are often called ______ auditors
independent
what are 3 examples of what auditors provide assurance on?
- financial statement 2. effectiveness of internal control over financial reporting 3. corporate sustainability reports
Auditing is the accumulation and evaluation of evidence about information to determine and ____ on the degree of correspondence between the information and established criteria
report
an auditor must have an independent what?
mental attitude
Auditing is the ____ and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria
accumulation
Evidence is any info used by the auditor to determine whether the info being ____ is stated in accordance with established criteria
audited
Auditing should be done by a _____ and _____ person
competent independent
auditors strive to maintain a high level of ____ to keep the confidence of users relying on their reports
independence
how is criteria diecided on for subjective info?
the auditors and the entitities being audited agree on the criteria well before audit starts
any info used by the auditor to determine whether the info being audited is stated in accordance with established criteria is called?
evidence
Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of ____ between the information and established criteria
correspondence
the audtor must be competent to know what?
the types and amount of evidence to accumulate
Auditing is the accumulation and evaluation of evidence about ____ to determine and report on the degree of correspondence between the information and established criteria
information
Evidence is any info used by the auditor to determine whether the info being audited is ____ in accordance with established criteria
stated
The auditor must be qualified to understand what?
the criteria used (GAAP)
Evidence is any info used by the ____ to determine whether the info being audited is stated in accordance with established criteria
auditor
What would be the criteria for auditing historical financial statements by CPA firms? 2
- GAAP 2. IFRS
auditors must determine the type and amount of evidence necessary and evaluate what?
whether the info correspones to the established criteria
the competence of those performing the audit is of little value if they are _____ in the accumulation and evaluation of evidience
biased
what are 4 forms of evidence?
- electronic and documentary data about transactions 2. written and electronic communication with outsiders 3. observations by the auditor 4. oral testimony of the client
Auditing is the accumulation and evaluation of ____ about information to determine and report on the degree of correspondence between the information and established criteria
evidence
if irs auditing apple corport tax return what would be the criterial?
Internal REvenue code instead of GAAP
how are internal auditors kept independent of the operating units they audit?
they usually report to top managment and the board of directors
what is Evidence
any info used by the auditor to determine whether the info being audited is stated in accordance with established criteria