deck 4 Flashcards
the acceptable level of detection risk is inversely related to the
assurance provided by substantive tests
when an auditor concludes that there are high risks of material misstatements they should
select more substantive tests
a decrease in the number of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to
preform procedures closer to the bs date…
In obtaining an understading of an entities internal control structure, the auditor is NOT OBLIGATED TO
Search for deficiencies in IC….However if defeciencies are identified, they get reported to the audit committee…
employee manuals are a component of the????
Control Environment
an auditor may decide to assess control risk at the maximum level for certain assertions because the auditor believes
control policies and procedures are likely to pertain to the assertions…
the objective of tests of details of transactions performed as tests of controls is to
evaluate whether internal control structure procedures operated effectively
when assessing an internal auditors objectivity????
consider policies that prohibit internal auditors from auditing areas where they were recently assigned…
to assess competence of an internal auditor, obtain information about the
quality of the internal auditors working paper documentation
when using the work of the internal auditor????
place a limited reliance on their work
results of analytical procedures can be used to
assess the competence and objectivity of an internal auditor….
To provide assurance that each voucher is submitted and paid only once, an auditor would most likely examine a sample of paid vouchers and determine whether each voucher is ?
Stamped as paid
To provide for adequate segregation of duties, the person who signs checks should also be responsible for ?
mailing them!
To determine whether checks are being issued for unauthorized expenditures, an auditor would most likely select items for testing from the population of all
Canceled checks
a benefit of using electronic funds transfer for international cash transactions
Reduction of the frequency of data entry errors
prevent an invoice for the purchase of merchandise from being paid twice
The check signer reviews and cancels the voucher packets
no approved po=
goods not taken in receiving
the vouchers payable department does not
control the mailing of the check and remittance advice…
When the shipping department returns nonconforming goods to a vendor, the purchasing department should send to the accounting department the
Debit memo
advises accounting that the vendor invoice should not be paid in full due to returned goods
Employees who approve PO’s can negotiate ?
terms with vendors
Accounting for unused prenumbered purchase orders and receiving reports is not completed by the ?
vouchers payable department
