don't be a silly willy Flashcards
if required quarterly data is omitted, what must the auditor include in the audit report?
the company has not selected to present the quarterly data
where does an auditor begin when testing for existence?
accounting records, then supporting documents
why would AR turnover increase due to more aggressive collection of accounts?
collecting more AR will decrease average AR (denominator) which will increase the ratio
what is the impact on sample size when population variability increases?
sample size increases too
what is the primary reason an auditor requests that letters of inquiry be sent to a client’s attorney?
corroboration
improper disclosure of a going concern can result in an [opinion]?
qualified/adverse
what does the days sales in AR indicate?
the avg number of days required to collect AR
what assertion is tested when an auditor traces deposits in transit to cut off statement?
existence
what assertion is tested when auditor traces outstanding checks to cut off statement
completeness
what are inherent limitations of internal control?
human error
management override of controls
collusion
reselling a product to a client does not violate independence or require disclosure as long as
the client is non attest
firm takes full ownership of the product
in what type of engagement can an auditor state that material weaknesses were not identified?
financial statement audit of a non-issuer where no opinion on IC is presented
with regard to preparing a flowchart of IC over expenditures, what type of audit procedure is this considered?
risk assessment procedure other than analytical procedures
when an auditor uses past transactions to determine if they were properly approved or rejected, what type of data analytics is used?
predictive
what type of data applies to:
describing an outcome
explaining why an outcome
predicting an outcome
descriptive
diagnostic
prescriptive
when an auditor determines that significant assumptions do not present a reasonable basis for a financial forecast, what type of opinion is issued?
adverse
GAGAS vs GAAS report on internal control:
GAGAS: report on auditor’s scope of IC
GAAS: only report when significant deficiencies are found
which opinion requires the basis for opinion section to include the phrase “as discussed above…”?
qualified due to GAAS issue
in which section is 1) the PCAOB and 2) GAAP mentioned in an audit report?
basis for opinion
opinion
what are the required reports and its level of assurance for single audits?
compliance - reasonable assurance
IC - no assurance
schedule of findings and questioned costs
what are the required reports and its level of assurance for GAGAS audits?
compliance - no assurance
IC - no assurance
what are the required reports and its level of assurance for GAAS audits?
FS report - reasonable assurance
