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ACC-420 > Chapter 7 > Flashcards

Chapter 7 Flashcards

1
Q

Evaluations of financial information through analysis of plausible relationships among financial and nonfinancial data

A

Analytical Procedures

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2
Q

A measure of the quality of evidence; appropriate evidence is relevant and reliable in meeting audit objectives for classes of transactions, account balances, and related disclosures

A

Appropriateness of Evidence

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3
Q

Record of the audit procedures performed, relevant audit evidence, and conclusions the auditor reached

A

Audit Documentation

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4
Q

Detailed instructions for the collection of a type of audit evidence

A

Audit Procedure

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5
Q

List of audit procedures for an audit area or an entire audit; the audit program always includes audit procedures and may also include sample sizes, items to select, and timing of tests

A

Audit Program

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6
Q

The auditor’s receipt of a direct written or electronic response from a third party verifying the accuracy of information requested

A

Confirmation

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7
Q

All audit files applicable to the year under the audit

A

Current Files

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8
Q

A document, such as a vendor’s invoice, that has been used by an outside party to the transaction being documented and that the client now has or can easily obtain

A

External Document

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9
Q

The obtaining of written or oral information form the client in response to specific questions during the audit

A

Inquiry

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10
Q

The auditor’s examination of the client’s documents and records to substantiate the information that is or should be included in the financial statements

A

Inspection

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11
Q

A document, such as an employee’s time report, that is prepared and used within the client’s organization

A

Internal Document

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12
Q

An audit schedule that contain the detailed accounts form the general ledger making up a line item total in the working trial balance

A

Lead Schedule

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13
Q

Looking at the process or procedure being performed by others

A

Observation

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14
Q

Auditor’s files that contain data of a historical or continuing nature pertinent to the current audit such as copies of articles of incorporation, bylaws, bond indentures, and contracts

A

Permanent Files

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15
Q

The degree to which the auditor is convinced that the evidence supports the audit opinion; sufficient and appropriate of the evidence

A

Persuasiveness of Evidence

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16
Q

The auditor’s inspection or count of a tangible asset

A

Physical Examination

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17
Q

The rechecking of a sample of the computations made by the client, including mathematical accuracy of individual transactions and amounts and the adding of journals and subsidiary records

A

Recalculation

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18
Q

The extent to which evidence is believable or worthy of trust; evidence is reliable when it is obtained (1) from an independent provider, (2) from a client with effective internal controls, (3) from the auditor’s direct knowledge, (4) from qualified providers such as law firms and banks, (5) from objective sources, and (6) in a timely manner

A

Reliability of Evidence

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19
Q

The auditor’s independent tests of client’s accounting procedures or controls that were originally done as part of the entity’s accounting and internal control system

A

Reperformance

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20
Q

The quantity of evidence; proper sample size

A

Sufficiency of Evidence

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21
Q

Detailed schedules prepared by the client or the auditor in support of specific amounts on the financial statements

A

Supporting Schedules

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22
Q

Symbols used on an audit schedule that provide additional information or detail of audit procedures performed

A

Tick Marks

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23
Q

The use of documentation to determine if transactions or amount are included in the accounting records

A

Tracing

24
Q

Significant unexpected differences indicated by analytical procedures between the current year’s unaudited financial data and other data used in comparisons

A

Unusual Fluctuations

25
Q

The use of documentation to support recorded transaction or amounts

A

Vouching

26
Q

A listing of the general ledger accounts and their year-end balances

A

Working Trial Balance

27
Q

Information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria

A

Evidence

28
Q

Auditors must determine the BLANK and BLANK of evidence needed to be satisfied that the client’s financial statements are fairly stated

A

Appropriate types and amounts

29
Q

The 4 decisions about what evidence to gather and how much of it to accumulate

A

Which audit procedures to use, what sample size to select for a given procedure, which items to select from the population, and when to perform the procedures

30
Q

The BLANK for any given procedure is likely to vary from audit to audit

A

Sample size

31
Q

Audit standards require the auditor to accumulate BLANK

A

Sufficient appropriate evidence to support the opinion issued

32
Q

Two most important factors in determining sample size are

A

Expectation of misstatements and the effectiveness of the client’s internal controls

33
Q

Analytical procedures are required during BLANK and BLANK phases of the audit and recommended during the BLANK phase

A

Planning and completion, Testing

34
Q

Most expensive types of evidence

A

Physical examination and confirmation

35
Q

Moderately costing types of evidence

A

Inspection, analytical procedures, and reperformance

36
Q

Least expensive types of evidence

A

Observation, inquiries of the client, and recalculation

37
Q

Type of evidence for the terms examine, read, trace, compare, and vouch

A

Inspection

38
Q

A reasonable detailed study of a document or record to determine specific facts about it

A

Examine

39
Q

An examination of written information to determine facts pertinent to the audit

A

Read

40
Q

The following of information from one point to another

A

Trace

41
Q

Matching together information from different locations

A

Compare

42
Q

The use of documents to verify recorded transactions or amounts

A

Vouch

43
Q

Type of evidence for the terms scan and compute

A

Analytical procedures

44
Q

A less-detailed examination of a document or record to determine whether there is something unusual warranting further investigation

A

Scan

45
Q

A calculation done by the auditor independent of the client

A

Compute

46
Q

Type of evidence for the terms recompute and foot

A

Recalculation

47
Q

A calculation done to determine if a client’s calculation is correct

A

Recompute

48
Q

Addition of a column of numbers to determine whether the total is the same as a client’s

A

Foot

49
Q

Type of evidence for the term trace

A

Reperformance

50
Q

Type of evidence for the term count

A

Physical Examination

51
Q

A determination of assets on hand at a given time

A

Count

52
Q

Type of evidence for the term observe

A

Observation

53
Q

Are the primary frame of reference used by supervisors personnel to review the work of assistants

A

Audit Files

54
Q

Audit documentation prepared during the engagement is the property of BLANK

A

The auditor

55
Q

Record for audits of private companies must be held for BLANK years and for public companies BLANK years

A

5 and 7

56
Q

Permanent files normally include

A

Copies of files of continuing importance, analysis of previous years accounts, information about internal control and control risk, and results of prior analytical procedures

57
Q

Found in the current files

A

Audit program, general information, working trial balance, adjusting and reclassification entries, and supporting schedules

ACC-420 (16 decks)

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