Evidence Accumulation and Evaluation

Question 1

All the information used by the aduitor in arriving at the conclusions on which the audit opinion is based–includes info contained in accounting records and other information

Answer 1

Audit evidence

Question 2

Type of evidence collection procedure that includes procedures such as inspecting assets, confirming receivables and observing the counting of inventory

Answer 2

Search and verification procedures

Question 3

Type of evidence collection procedure that includes discussions with firm representatives and analytical procedures such as ratio analysis

Answer 3

Internal inquiry and comparision procedures

Question 4

Type of accounting engagement that offeres the highlest level of assurance

Answer 4

Examination (an audit is an examination of financial statements)

Question 5

A measure of the quanitty of audit evidence that should be obtained

Answer 5

Sufficient

Question 6

a measure of hte quality of audit evidence that should be obtained–measured by its relevance and reliability

Answer 6

Appropriate

Question 7

An audit procedure used to obtain an understanding of the entity and its environment, including its internal control

Answer 7

Risk assessment procedures

Question 8

Audit procedure used, when necessary, or when the auditor has decided to do so, used to test the operating effectivenss of controls at the relevant assertion level

Answer 8

Test of controls

Question 9

Audit procedure usedto detect material misstatemensts in trnasactions, account balances, and disclosures. Include analytical procedures and test of details

Answer 9

Substantive prcoedures–used to restrict detection risk

Question 10

A substantive procedures that consists of evaluations of financial information made by a study of plausible relationships among financial and nonfinancial data
–REQUIRED during risk assessment and near the end of hte audit, but NOT required as a substantive procedure (even though it’s one type that may be used)

Answer 10

Analytical procedures

Question 11

Substantive procedure used to examine the acutal details making up the various account balances and disclosures

Answer 11

Test of details

Question 12

A listing of ledger accounts with current year-end balances, with columns for adjusting and reclassifying entries as well as for final balnces for hte current year

Answer 12

Working trial balance

Question 13

Schedules that summarize like accounts, thetotal of which istypically transferred to hte working trial balance

Answer 13

Lead schedule

Question 14

The combination of numbers and/or leggers given to a workpaper page for identifcationand organization purposes

Answer 14

Index

Question 15

Files that contain corroborating information pertaining to the current year’s audit program (ex. cash confirmation)

Answer 15

Current workpaper files

Question 16

Files taht contain information that is expeted to be used bytheauditor on many future audits of a client

Answer 16

permanent workpaper files

Question 17

No deletions of audit documentation are allowed after this date

Answer 17

Documentation completion date

Question 18

A form of fraud that overstates cash by causing it to be simultaneously included in 2 or more bank acounts–possible because a check takes several days to clearthe bank

Answer 18

Kiting

Question 19

shows the dates of all transfers of cash among the client’s various bank accounts–primary purpose is to help auditors detect kiting

Answer 19

Bank transfer schedule

Question 20

A bank statement for hte first 8-10 business days after year-end–primary purpose is to help auditors verify reconciling items on the year-end bank rec

Answer 20

Bank cutoff statements

Question 21

A form used by auditors to obtain informtion from financial instuttions by requesting informtion on deposit and loan balances–designedto substantiate evidence primarily on the existence assertion

Answer 21

Standard confirmation form

Question 22

Deposits that have been sent to the bank prior to year-end but have not been received by the bank as of year-end

Answer 22

Deposits in transit

Question 23

A transaction in which a customer agrees to purchase goods but hte seller retains physical posession until the customer requests shipment to designated locations–should not be included in revenue

Answer 23

Bill and hold transactions

Question 24

Agreements usedto alterhte terms and conditions of recorded sales transactions, often toconvince customers to accept delivery of goods and services–may preclude revenue recognition

Answer 24

Side agreements

Question 25

A marketing practice that wsuppliers sometimes use to boost sales by inducing distributors to buy substantially more inventory than they can promptly sell–may result in need to increase the level of anticipated sales returns

Answer 25

Channel stuffing (trade loading)