Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Assurance > Evidence and sampling > Flashcards

Evidence and sampling Flashcards

1
Q

What type of substantive procedures are set out by ISA 500?

A
  1. Inspection of assets or documents
  2. Observation
  3. Inquiry
  4. Confirmation
  5. Recalculation
  6. Reperformance
  7. Analytical procedures
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the two traditional categories of computer-assisted audit techniques?

A
  1. Test data

2. Audit software

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Describe test data

A

Auditor data is put into the client’s system. The data can be real or dummy the system can be live or a copy.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Describe audit software

A

Client’s data is put into the auditor’s system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

When is test data used?

A

To test the controls in the system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

When is audit software used?

A

For basic data analysis and substantive testing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the process of performing analytical procedures?

A
  1. Understand the business
  2. Develop an expectation
  3. Compare actual to expectation
  4. Unexpected variations = risk
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What does ISA 520 state?

A

That the auditor can use analytical procedures as a form of substantive procedure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are analytical procedures as a form of substantive procedure dependent on?

A
  1. Strength/comparability of relationships
  2. Reliability of the data being used in the analysis
  3. The level of disaggregation of the data available
  4. The depth of the auditor’s knowledge of the client
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the direction of testing for overstatement?

A
  1. Figure in accounts
  2. Intermediate documentation
  3. Supporting evidence
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the direction of testing for understatement?

A
  1. Reciprocal population
  2. Supporting evidence
  3. Intermediate documentation
  4. Figure in the accounts
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What does ISA 540 set out?

A

The audit approach for estimates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Why are estimates high risk?

A

They are subjective in nature and they have a higher risk of management basis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What are the most common procedures for an accounting estimate?

A
  1. Review and test the process used by management to develop the estimate
  2. Use an independent expert to make an estimate for comparison with the company’s figure
  3. Review subsequent events for confirmation of the accuracy of the deadline
  4. Test the operating effectiveness of the controls over how management made the estimate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

According to ISA 530, what is the objective of the auditor when using sampling?

A

To provide a reasonable basis for the auditor to draw conclusions about the population from which the sample is selected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the sampling process?

A
  1. Identify population
  2. Identify sampling unit
  3. Select sample
  4. Identify errors
  5. Draw conclusions
17
Q

Define population

A

The entire set of data from which a sample is selected

18
Q

Define sampling units

A

The individual items constituting a population

19
Q

According to ISA 530, how should an auditor select items for sampling?

A

In such a way that each sampling unit in the population has a chance of selection

20
Q

Is random selection sampling statistical or non-statistical?

A

Statistical

21
Q

Is random systematic selection sampling statistical or non-statistical?

A

Statistical

22
Q

Is money unit sampling statistical or non-statistical?

A

Statistical

23
Q

Is haphazard selection sampling statistical or non-statistical?

A

Non-statistical

24
Q

Is sequence selection sampling statistical or non-statistical?

A

Non-statistical

25
Q

Is block selection sampling statistical or non-statistical?

A

Non-statistical

26
Q

According to ISA 530, which factors influence sample sizes?

A
  1. Increase in the desired level of assurance
  2. Increase in the expected error
  3. Stratification of the population
  4. Increase in the number of sampling units in the population
  5. Increase in the auditor’s assessment of the risk of material misstatement
  6. Increase in the tolerable misstatement
27
Q

If management refuses to correct misstatements, what should the auditor do?

A
  1. Obtain an understanding of the reasons of refusal
  2. Determine whether the misstatements are material
  3. Communicate the uncorrected misstatements to those charged with governance and request they be corrected, explaining that the audit report will be modified if material misstatements are not corrected
28
Q

Which matters are material by nature rather than size?

A
  1. Misstatements that affect compliance with laws and regulations
  2. Misstatements that affect compliance with debt covenants
  3. Misstatements that affect ratios used to evaluate financial position, results, or cash flows
  4. Misstatements that increase management compensation

Assurance (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions