Chapter 4 - Audit Evidence Flashcards
1
Q
Audit Evidence
A
Supports Audit Opinion
2
Q
Ways to gather audit evidence
A
- Risk assessment procedures
- Test of controls
- Substantive procedures
- Other audit procedures
3
Q
Substantive testing purpose
A
Detect material misstatement in F/S
4
Q
Sufficient audit evidence
A
Valid & Relevant
5
Q
Hierarchy of audit evidence
A
A - Auditor’s direct knowledge & observation
E - External evidence
I - Internal evidence
O - Oral evidence
6
Q
Substantive procedures
A
$ balances & transaction totals & disclosure amounts
7
Q
Predictability
A
- IS accounts are more predictable
- Accts w/ management discretion are less predictable
8
Q
Confirmation
A
HAVE to be in writing
9
Q
Relevant Assertions
A
- Account Balances
- Transactions and Events
- Presentation and Disclosure
10
Q
Segregation of Duties
A
- A Authority
- R Record Keeping
- C Custody
11
Q
Positive Confirmations
A
- Large $
- Expected errors
- Poor IC
12
Q
Negative Confirmations
A
- Low Risk
- Small $
- Expect customer attention
13
Q
Blind Copy
A
Forcing recvd dept. to count (# computers)
14
Q
Four functions
A
- Purchasing
- Receiving
- Accounts Payable
- Treasury
15
Q
A/P Confirmations
A
NOT REQUIRED
