Chapter 7 Flashcards
Evaluations of financial information through analysis of plausible relationships among financial and nonfinancial data
Analytical Procedures
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
Appropriateness of Evidence
Record of the audit procedures performed, relevant audit evidence, and conclusions the auditor reached
Audit Documentation
Detailed instructions for the collection of a type of audit evidence
Audit Procedure
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
Audit Program
The auditor’s receipt of a direct written or electronic response from a third party verifying the accuracy of information requested
Confirmation
All audit files applicable to the year under the audit
Current Files
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
External Document
The obtaining of written or oral information form the client in response to specific questions during the audit
Inquiry
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
Inspection
A document, such as an employee’s time report, that is prepared and used within the client’s organization
Internal Document
An audit schedule that contain the detailed accounts form the general ledger making up a line item total in the working trial balance
Lead Schedule
Looking at the process or procedure being performed by others
Observation
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
Permanent Files
The degree to which the auditor is convinced that the evidence supports the audit opinion; sufficient and appropriate of the evidence
Persuasiveness of Evidence
The auditor’s inspection or count of a tangible asset
Physical Examination
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
Recalculation
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
Reliability of Evidence
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
Reperformance
The quantity of evidence; proper sample size
Sufficiency of Evidence
Detailed schedules prepared by the client or the auditor in support of specific amounts on the financial statements
Supporting Schedules
Symbols used on an audit schedule that provide additional information or detail of audit procedures performed
Tick Marks
The use of documentation to determine if transactions or amount are included in the accounting records
Tracing
Significant unexpected differences indicated by analytical procedures between the current year’s unaudited financial data and other data used in comparisons
Unusual Fluctuations
