Chapter 5 Terms

Question 1

Accounting records

Answer 1

The record of initial entries and supporting records such as checks and records on electronic fund transfers; invoices; contracts; the general ledgers; journal entries, spreadsheet supporting cost allocations, computations, reconciliations and disclosures

Question 2

Appropriateness of audit evidence

Answer 2

The measure of the quality of audit evidence; that is its relevance and reliability in providing support for the conclusions on which the auditors opinion is based

Question 3

Audit data analytics

Answer 3

Using analysis, modeling and visualization to discover and analyze patterns, anomalies, and other information in data in the context of the audit

Question 4

Audit documentation

Answer 4

The auditor’s principal record of the work performed and the basis for the conclusions in the auditors report

Question 5

Audit Evidence

Answer 5

Information used by the auditor in arriving at the conclusions on which the auditor’s opinion is based

Question 6

Audit procedures

Answer 6

Specific acts performed by the auditor in gathering evidence to determine if specific

Question 7

Audit prgram

Answer 7

A set of audit procedures prepared to test assertions for a component of the financial statements

Question 8

Confirmation

Answer 8

Audit evidence obtained by the auditor as a direct written response to the auditor from a 3rd part in paper form or by electronic or other media

Question 9

External information source

Answer 9

An external individual or organization that provides information that is used by the entity in preparing the financial statements or that ahs been obtained by the auditor as audit evidence when such information is suitable for use by a broad range of users

Question 10

Inquiry

Answer 10

Seeking information of knowledgeable persons, both financial and non financial, within the entity or outside the entity

Question 11

Inspection

Answer 11

Examination of internal or external records or documents that are in paper form, electronic form, or other media

Question 12

Observation

Answer 12

Watching a processes or procedure being performed by others

Question 13

Persuasiveness

Answer 13

Relates to the auditor obtaining appropriate audit evidence that is sufficient for the auditor to draw a reasonable conclusion about the entity’s financial statements

Question 14

Recalculation

Answer 14

The auditor’s checking the mathematical accuracy of documents or record either manually or electronically

Question 15

Relevance of evidence

Answer 15

The relevance of audit evidence refers to its relationship to the assertion or to the objective of the control being tested

Question 16

Reliability of evidence

Answer 16

The diagnosticity of evidence - that is, whether the type of evidence can be relied on to signal the true state of the assertion

Question 17

Reperformance

Answer 17

The auditor’s independent execution of procedures or control that were originally performed as part of the entity’s

Question 18

Sufficiency

Answer 18

The measure of the quantity of audit evidence affected by the auditor’s assessment of the risks of material misstatement and the quality of the audit evidence obtained

Question 19

Tracing

Answer 19

Refers to selecting a source document and testing that is is included in the accounting journal or ledger

Question 20

Vouching

Answer 20

Refers to selecting an item for testing from the accounting journals or ledgers and then examining the underlying source document