Chapter 5 SB HW Flashcards
Whether assets, liabilities and equity have been recorded in the proper accounts is related to the ________ assertion.
classification
On most audit engagements, ______ makes up the bulk of the evidence gathered by the auditor.
inspection of records or documents
The second step in the analytical procedures decision process is to define a ___________ difference.
tolerable
The basic framework for the auditor’s understanding of audit evidence and its use in supporting the auditor’s opinion on the financial statements are ____________.
auditing standards
A set of audit procedures prepared to test assertions for a component of the financial statements is usually referred to as an ______________.
audit program
For lower-risk, well-controlled accounts, the assurance bucket may be filled entirely with tests of ________ and substantive analytical procedures.
controls
The functions of audit documentation are to
- Provide basis for review
- Provide support that audit was conducted in accordance with GAAS
- Aid in planning, performance, and supervision
The primary concern of ______ is simply whether the relationship used to test the assertion makes sense
plausibility
Unexpected differences may be addressed by reviewing the _________ for sufficient evidence.
work papers
During planning, the auditor determines whether planned procedures need to be revised due to ________ analytical procedures.
preliminary
Entity personnel may be asked to explain unexpected ________.
differences
In general, ______ analysis is the least precise method to form an expectation, while ______ analysis is the most precise.
trend; reasonableness
Management stating that all major restrictions on the entity resulting from debt covenants are disclosed in the footnotes and expressed clearly to users of the financial statements is an example of the ______ assertion.
completeness
Examining internal or external records or documents that are in paper form, electronic form, or other media is known as _______.
inspection
The auditor can issue an unqualified/unmodified report when audit evidence supports management’s _______.
assertions
Audit documentation is referred to as ____________ or the audit file.
working papers
All types of analysis are used for substantive analytical procedures, but ______ analysis is not commonly used for risk assessment or final analytical procedures.
reasonableness
Because the entity’s personnel might have incentives to record fictitious transactions, the ________assertion is relevant to revenue transactions.
occurence/validity
Whether amounts and other data relating to recorded transactions and events have been recorded appropriately is addressed by the ______ assertion.
accuracy
Ensuring that ordinary repairs to assets are charged to the repairs and maintenance expense account and not capitalized tests the ______ assertion.
classification
A management statement that the inventory shown on the balance sheet was available for sale at the balance sheet date is an example of the _______
assertion.
existence
A statement by management that the ending balance of Notes Payable represents the total outstanding notes due at the balance sheet date is an example of the __________ assertion.
completeness
