Chapter 3.2: Process of assurance- Planning

Question 1

Error vs Fraud?

Answer 1

Error is unintentional and fraud is intentional

Question 2

What is missapropriation of assets?

Answer 2

Theft. e.g. Ghost employees

Question 3

What is analytics procedures?

Answer 3

Evaluation of financial information through analytics of plausible relationships between financial and non-financial data.

Question 4

When must analytics procedures be done and when may it be done?

Answer 4

Must be done at the beggining and end, can be done during as a form of substantive testing.

Question 5

What are the steps of Analytic procedures?

Answer 5

1) Understand the business
2) develop an expectation
3) Compare actual to expectations
4) Unexpected variation = Risk