gogo AUD Flashcards
To obtain evidence regarding control risk, an auditor selects tests from techniques including:
- calculation
- inquiry
- confirmation
- analytical procedures
為了獲得有關控制風險的證據，審計師選擇以下技術進行測試：
1. Inquiry of personnel.
2. Observation of operations.
3. Inspection of documents and records.
4. Reperformance of control procedures.
5. Computer-assisted audit techniques (CAATs).
which would not be considered a relevant assertion when testing transactions and events during a client audit
- valuation, allocation and accuracy
- rights and obligations
[2
keywords: relevant assertion, test transactions–>cove up
NO <R></R>
Completeness
cutOff
Valuation, allocation, and accuracy
Existence and occurrence
Understandability of Presentation and classification
the objective when an auditor decides to employ classical variable sample
- to determine the reliability of voucher processing
- to determine the inventory quantities on hand
[2
keyword:
variable sample–>quantity/error rate
attribute sample–>reliability
which would be used to estimate a numerical measurement of a population, such as a dollar value?
1. variable sample
2. attribute sample
[1
variable-numerical
attribute- evaluation
the primary reason the auditor hesitates to use embedded audit modules?
1. auditors are required to be involved I the system design of the application to be monitored
2. embedded audit modules cannot be protected from computer viruses
[1
嵌入式審計模組是應用程式程式碼的一部分，用於為審計員收集交易資料。 嵌入式審計模組通常在應用程式開發時內建於應用程式中。 這將要求審計員參與要監控的應用程式的系統設計。
auditor believed not to be materially misstated based on an audit sample was materially misstated based on the total population of the account balance. this is what type of the sampling types of risks?
- incorrect acceptance
- incorrect rejection
[1
1. incorrect acceptance: 認為沒有錯，而導致誤判
2. incorrect rejection: 認為數據有錯而導致誤判
auditor should inquire who about risk of fraud within the entity?
1. management, internal audit, and committee
2. management, sales department head, and audit committess
[1
經理
中（企業中的會計師）
委員會
identifying related party transactions
1. sending second requests for unanswered positive confirmations of accounts receivable
2. Review accounting records for nonrecurring transactions recognized near the balance sheet date.
[2
which is true?
1. if the assessed level of fraud risk is high, the auditor should attempt to reduce detection risk
2. fraud risk is comprised of the risk of material misstatement detection risk
[1
audit risk(not fraud risk) is comprised of the risk of material misstatement and detection risk
which cannot help the auditor in evaluating the risk of improper revenue recognition due to fraud?
1. analysis of sales commissions over the most recent five year period
2. comparison of revenue reported by month and by product line for the current and prior years.
[1
1. revenue 不是影響因素，而是結果
2.使用分類收入資料的分析程序可能表示存在欺詐行為的異常關係
the risk of material misstatement is inversely related to?
1. detection risk
2. substantive testing
[1
substantive testing will increase if the risk of material misstatement increased
DM是一對相反，Dfor detection， Mformaterial
重大不合規風險是指存在未被發現的重大偏差或不合規的可能性。 不合規檢測風險是指審計程序未能偵測到這些偏差的風險。
簡而言之，如果重大不合規的風險很高，審計師就會降低對偵測風險的接受度（即，他們希望降低遺漏某些內容的可能性），反之亦然。 因此，當其中一個較高時，另一個通常會設定較低以進行補償，從而使它們成反比。
test all merchandise received is recorded, should use?
1. receiving reports
2. vendor’s invoices
[1
2–> the goods have not been received also has invoices
management’s refusal to allow an auditor to perform external confirmation procedures is considered a departure from GAAP sufficient to qualify the opinion.
why incorrect?
depart from GAAS, sufficient to qualify the opinion.
GAAS 涉及審計師在進行審計時遵循的標準和程序（審計的時候），而 GAAP 涉及編制財務報表時所使用的會計原則（公司在製作財務報表的時候）。
當管理層施加此類限制時，就會限制審計師獲取充分、適當的審計證據的能力，並可能因這種範圍限製而導致提出保留意見。所以違反的是GAAS
why negative confirmation of accounts receivable is less effective than positive confirmation of account?
1. the auditor cannot infer that all nonrespondents have verified their account information
2. a majority of recipients usually lack the willingness to respond objectively.
[1
應收帳款的否定確認涉及向客戶發送請求，要求他們僅在不同意所聲明的帳戶餘額時回應。 如果沒有回應，審計員就會認為餘額是正確的。
問題是，缺乏回應可能是由於除與餘額一致之外的各種原因造成的（例如，確認可能已遺失、被忽視或忽略）。 因此，在否定確認的情況下，審計師無法推斷所有非受訪者都已驗證其帳戶資訊。 這使得它不如積極確認結論性和有效，積極確認需要明確的回應來確認平衡，從而提供更明確的證據。
communication of significant deficiencies and material weakness must include restricted use of language.
why incorrect?
in an integrated audit for a nonissue, no restriction is required. restricted use language only when part of an audit of the financial statements.
communication of significant deficiencies and material weaknesses must be made by the report release date.
T or F?
[T
The statement is generally accurate. According to auditing standards, the communication of significant deficiencies and material weaknesses identified during an audit should be made in writing to those charged with governance (typically the board of directors or audit committee) by the report release date. The report release date is the date the auditor grants the client permission to use the audit report in conjunction with the financial statements. This timely communication ensures that the responsible parties are made aware of the issues and can take necessary corrective actions.
to gain assurance that all inventory items in a client’s inventory listing schedule are valid, an auditor most likely would trace:
existence/ value
- items listed in receiving reports and vendor’s invoices to the inventory listing
- items in the inventory listing to inventory tags and the auditor’s recorded count sheets.
existence(vouch)
<2>
however, the term trace is sometimes used interchangeably with the term vouch
by ensuring that all required disclosures related to property, plant, and equipment are adequately disclosed in the footnote, the auditor would be testing what assertions?
1. completeness
2. understandability of presentation and classification
[1
2–> Read all required disclosures for understandability and relevance
to identify the fictitious sales, what should the auditor do?
1. select a sample of entries in the sales journal and trace to the related sales invoices
2. select a sample of sales invoices and trace to the related shipping documents.
[2
sales jornal and sals invoices 可以造假
which is incorrect?
1. perform control testing around the cash disbursement process
2. omit substantially all of the disclosures required by generally accepted accounting principles
[1
to test the existence assertion of PP&E
1. obtaining a detailed fixed-asset register and ensuring depreciation methods are applied consistently
2. obtaining a listing of all current-year additions, vouching significant additions to original invoices, and determining that they have been placed in service.
[2
1–> tests the valuation, allocation, and accuracy assertion
conceptual difference between the attestation standards and generally accepted auditing standards
1. the requirement that the practitioner be independent is omitted from the attestation standards
2. the attestation standards provide a framework for the attest function beyond financial statements
[2
認證標準與公認審計標準之間的概念差異
1.認證標準中省略了從業人員獨立性的要求
2. 鑑證準則為財務報表以外的鑑證職能提供了一個框架
assertion related to the audit objective that verifies all sales have been recorded?
1. cuttoff
2. completeness
[2
the purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the:
1. human resources function from the cotrollership function
2. authorization of transactions from the custody of related assets.
[2
(cost) use what audit procedure
1. traced and agreed to supporting invoice
2. agreed amount to the subsidiary ledger
[1
at the year end, a major customer field for bankruptcy.
adjusting journal entry
dr: operating expense(bad debt expense)
cr: allowance for doubtful account
which will least affect the nature and extent of audit documentation?
1. the content of the representation letter
2. the nature of the specific audit procedures
[1
審計文件通常包括所執行的程序、所獲得的證據以及審計員得出的結論的記錄。 雖然陳述函（審計結束時管理層給審計師的一封信）是重要的審計證據，但這封信的內容通常不會影響審計師在審計期間產生的文件數量或類型。 相反，陳述信提供了管理階層對各種事項的書面主張。
另一方面，具體審計程序的性質直接決定了收集哪些證據，從而決定要記錄哪些內容。 不同的程序會產生不同類型和數量的證據，因此它們對審計文件的性質和範圍有直接影響。
which computer-assisted auditing techniques process client input data on a controlled program under the auditor’s control to test controls in the computer system?
1. parallel simulation
2. test data
[1
parallel simulation is a technique in which the auditor reprocessed the client’s data using the auditor’s own software. the auditor then compares his or her results to those obtained by the client
parallel VS integrated
數據性質：平行模擬使用實際客戶數據，而ITF使用插入客戶系統的虛構數據。
與客戶操作的整合：ITF交易作為客戶正常運營的一部分進行處理，而平行模擬則獨立進行。
重點：平行模擬專注於數據處理的準確性，而ITF還評估系統內部控制的有效性。
干擾：平行模擬對客戶的日常運營干擾較小，因為它是獨立進行的，而ITF在實際運營期間整合到客戶系統中。
according to PCAOB, the relevance of audit evidence depends on all of the following except:
1. the circumstances under which the audit evidence is gathered
2. the timing of the audit procedure
3. whether the audit procedure is designed to test for an understatement or overstatement
4. the auditor’s risk assessment
<1,4>
1–> related to the reliability of evidence
4–> Risk assessment affects the nature, extent, and timing of audit procedures
an antity prepares F/S on its income tax basis. a description of how that basis differs from GAAP should be included in the:
1. emphasis-of-matter paragraph of the auditor’s report
2. notes to the financial statements
[2
the emphasis-of-matter should [refernce) the note that explains how the basis differs from GAAP, but does not include a [description) of how the other comprehensive basis of accounting differs from GAAP
equipment acquisitions that are misclassified as maintenance expense most likely would be detected by an internal control activity that provides for:
1. independent verification of invoices for disbursements recorded as equipment acquisitions,
2. invenstigation of variances within a formal budgering system
[2
Examining invoices for disbursements recorded as maintenance expenses would include:
1.Verifying the vendor details.
2.Checking the date and amount.
3.Reviewing the description of services or goods provided.
4.Ensuring proper authorization and approval.
5.Comparing with budgeted or expected maintenance costs.
6.Confirming the allocation to the correct account code or category.
7.Detecting any inconsistencies or anomalies.
2) is included in the 5.
describes a weakness in A/P procedures
1. the A/P manager issuer purchase orders
2. the A/P payable system compares the receiving report to the vendor invoice
[1
1–>purvhase order should be issued by the purchasing department
2–>account payable department: compared the purchase order, receiving report and vendor invoice
the accompanying projection is present in conformity with guidelines for the presentation of a projection established by the Public Company Accounting Oversight board.
T or F?
[F
該聲明「附帶的預測是根據公眾公司會計監督委員會（PCAOB）為預測的呈現制定的指南而呈現的」不太可能包含在對財務預測的審查報告中，因為根據我在2022年1月的最後更新，PCAOB尚未為財務預測的呈現制定特定指南。
PCAOB主要監督公眾公司的審計，以確保財務報表和相關審計報告的準確性和完整性。他們的主要職責不是關於制定或呈現前瞻性的財務預測。
包含這樣的聲明可能會產生誤導，這意味著對於預測，PCAOB有特定的標準，但根據我的最後更新，事實上並沒有。如果財務報表的使用者認為PCAOB有這些預測的指南，他們可能會過分依賴它們。
the work of a management specialist who has a contractual relationship with the client may be acceptable under certain circumstances.
T of F
[T
Yes, auditors sometimes rely on the work of a management’s specialist when auditing financial statements, especially when evaluating complex areas that require specific expertise. A management specialist is an individual or organization possessing expertise in a field other than accounting or auditing, whose work in that field is used by the entity to assist in preparing the financial statements.
However, the use of a management specialist who has a contractual relationship with the client is acceptable under certain conditions:
1.Competence and Objectivity
2.Nature and Scope
3.Work Evaluation
4.Assumptions and Methods
5.Consistency with Other Evidence
6.Disclosure
which will not perform during an engagement of review?
1. comparing the financial statements wirh anticipated results in budgets and forecasts
2. obsercing the safeguards over access to and use of assets and records.
<2>
During a review of financial statements for a nonissuer, the focus is on limited assurance using mainly analytical procedures and inquiries, not detailed testing. Observing safeguards over assets and records is a thorough procedure typical of audits, not reviews. So, in a review, this observation is less likely because it’s beyond the review’s basic scope and purpose.
which is required in exercising due care?
1. consulting with experts
2. obtaining specialty accreditation
<1>
exercise of due care dictates consultation or referral when a professional engagement exceeds the CPA’s personal competence. 當專業參與超出註冊會計師的個人能力時，應採取應有的謹慎態度進行諮詢或轉介。
due care應有的注意
the auditor assesses control risk because it:
1. affects the level of detection risk that the auditor may accept
2. is relevant to the auditor’s understanding of the control environment
[1
Control Risk is the risk that a misstatement could occur and not be prevented or detected on a timely basis by the client’s internal controls.
可能發生錯誤且客戶的內部控制無法及時預防或發現的風險。
Detection Risk is the risk that the auditor’s procedures will fail to detect a misstatement.審計師的程序無法偵測到錯誤的風險。
如果審計師評估控制風險較高（意味著內部控制可能無法發現錯誤或詐欺），他們通常會接受較低程度的偵測風險來進行補償。 這意味著他們將進行更多實質測試，以確保發現任何潛在的錯誤陳述。 相反，如果控制風險被評估為低（強有力的內部控制），審計師可能會接受較高的檢測風險，並可能減少實質測試的程度。
accounting records alone provide sufficient support for an audit opinion.
T or F?
<F>
only accounting records are nor sufficient support for an audit opinion. the auditor must test the accuracy of the accounting records by performing analytical procedures and substantive procedures.
</F>
accounting records consist of records of initial journal entries and any supporting records.
T or F?
<T>
</T>
accounting estimates should be used when data concerning past events can be accumulated in a timely, cost-effective manner.
T or F?
Accounting estimates are used when the exact amount of a transaction is not known and cannot be determined with certainty. They are approximations or judgments that management makes, based on the best information available at that time, to assign a value to an accounting item when it cannot be precisely measured.
會計估計是對不確定的值或金額的教育性猜測。當無法確定確切的金額時，就會做這種猜測，因為在編製財務報表時無法確定確切的金額。
該說明建議在可以輕易且低成本地收集過去事件的數據時使用估計。但這有點誤導。如果您可以輕鬆且低成本地收集數據，您通常不需要估計；您只需要使用實際的數據。
使用會計估計的主要原因是當確切的數據並不容易獲得，或者它不切實際或太昂貴以至於無法獲得。例如，如果公司認為客戶可能不支付他們的賬單，他們將估計他們認為不會被支付的賬單的部分。這是因為他們在未來不能知道確切的數量，但他們仍然需要現在報告他們的最佳猜測。
Examples of accounting estimates include:
Allowance for doubtful accounts
Depreciation methods and useful lives
Provisions for lawsuits or litigations
Estimated warranty expenses
which would perform in the planning stage of a F/S audit?
1. compare recorded financial information with anticipated results from budgets and forecasts
2. communicate with those charged with governance concerning the prior year’s audit adjustments.
<1>
2–> not all of those charged with governance are not also involved with managing the entity, the auditor is required to communicate with those charged with governance concerning adjustments arising from the current year’s audit, not adjustments from the previous year.
the audited firm is privately held and the auditor provides valuation and appraisal services to an audit client, the results of which are material to the financial statements
independence impair or not
independence impair
which is correct?
1. the auditor is required to communicate all deficiencies in internal control to management, and deficiencies that constitute a significant deficiency or a material weakness to management and the audit committee.
2. the auditor is not required to communicate control deficiencies or significant deficiencies to management or the audit committee but must communicate material weakness to both management and the audit committee
<1>
to confirm the accounts receivable balance
1. copies of the client’s shipping documents that support the account balances
2. client-prepared statement of account that show the details of the account balance
<2>
2–>Client-prepared statements of account that show the details of the account balances.
This answer is correct because when client-prepared statements of account show details of account balances, it is likely that customers will be able to reply regardless of whether they maintain their payable records by invoice or month-end balance.
the purpose of tracing a sample of purchase orders and the related receiving reports to the purchases journal and the cash disbursements journal is:
1. determine that the purchases were properly recorded
2. verify that cash disbursements were for goods actually received
<1>
source document–>finacial records
tracing up
expenses/ liabilities
2–> Vouch back
financial statements of a nonissuer compiled without audit or review by an accountant should be accompanied by a report stating that:
1. the accountant has not audited or reviewed the financial statements
2. the scope of the accountant’s procedures has not been restricted in testing the financial information that is the representation of management.
<1>
1–>has not audit or review
2–>has not been restricted
an overall response to address a high-assessed risk of material misstatement at the financial statement level of a nonissuer may include:
1. providing more supervision of the audit team
2. incorporating additional predictability into the selection of procedures
<1>
1–>This is like having a teacher closely watch students during a test to make sure they’re doing it right.
2–> Unpredictability into the selection of procedures. This is like occasionally giving surprise quizzes so students can’t just prepare for expected test dates.
an auditor’s working trail balance generally contains columns for:
1. reclassifications and adjustments
2. accruals and deferrals
<1>
2–> included within audit documentation, but would not necessarily be shown in columns on the working trail balance. Accruals and deferrals are specific types of accounting adjustments, but the columns in an auditor’s working trial balance are typically more general to capture all potential adjustments, not just those limited to accruals and deferrals.
development of audit programs are part of a review procude.
T or F?
<F>
part of audit engagement
</F>
in auditing an entity’s computerized payroll transactions, an auditor would be least likely to test data to test controls concerning:
1. control and distribution of unclaimed checks
2. missing employee identification numbers
<1>
在審計實體的電腦化薪資交易時，審計師最不可能測試資料來測試以下方面的控制：
1. 無人認領支票的控制與分配
2. 缺少員工身分證號碼
在這兩個選項之間，#1（無人認領支票的控制和分配）與「電腦化薪資交易」的直接關係較小。 無人認領支票的處理通常與實體控制流程更相關（例如，支票如何儲存或在充公前保留多長時間），而不是電腦系統的處理。
因此，在測試專門涉及電腦化薪資交易的控制措施時，審計師最不可能測試有關無人認領支票的控制和分配的資料。
analytical procedures are required for:
1. internal control evaluation
2. audit planning
<2>
analytical procedures:
T.R.A.C.E.R.B.N.
Trend Analysis
Ratio Analysis
Actual vs. Budget
Cross-sectional Analysis
Estimations (Reasonableness Testing)
Regression Analysis
Benchmarks (comparisons with industry metrics)
Non-financial Analysis
which factor most likely would lead a CPA to conclude that a potential audit engagement should be rejected?
1. management has a reputation for consulting with
several accounting firms about significant accounting issues
2. It is unlikely that sufficient appropriate evidence is available to support an opinion on the financial statements.
<2>
While management consulting with several accounting firms about significant accounting issues might raise concerns about “opinion shopping” (seeking the firm that will give the most favorable treatment), it doesn’t automatically disqualify an engagement. However, it’s a red flag that warrants further inquiry.雖然管理層就重大會計問題向多家會計師事務所提供諮詢可能會引起人們對「意見購買」（尋求給予最優惠待遇的公司）的擔憂，但這並不會自動取消參與的資格。 然而，這是一個值得進一步調查的危險訊號。
If it is unlikely that sufficient appropriate evidence is available to support an opinion on the financial statements, this is a fundamental issue. The primary purpose of an audit is to obtain sufficient appropriate evidence to express an opinion on the financial statements. Without this evidence, the auditor cannot fulfill their primary responsibility.如果不可能有足夠、適當的證據來支持對財務報表的意見，那麼這就是一個根本問題。 審計的主要目的是取得充分、適當的證據以對財務報表發表意見。 如果沒有這些證據，審計師就無法履行其主要職責。
which is correct?
1. all significant deficiencies are material weaknesses
2. all material weaknesses are significant deficiencies
<2>
deficiencies< weakness（26個英文字母W 次序位於D的後面，所以weakness嚴重性比較大)
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company’s financial reporting.一個重要缺陷是內部控制中的缺陷，或多個缺陷的組合，其嚴重程度低於厳重弱點，但足夠重要，值得負責監督公司財務報告的人關注。
A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented or detected and corrected on a timely basis.一個厳重弱點是內部控制中的缺陷，或多個缺陷的組合，因此存在合理的可能性，實體的財務報表中的重大誤報不會被及時防止或檢測並及時糾正。
Control activities over safeguarding of accets may include controls relating to
1. the financial report objective
2. operations objectives
3. compliance objective
<1,2>
In simple terms: Think of safeguarding assets as locking up a bike. Locking the bike ensures it’s there when you need it (Operational Objective) and that its value is correctly represented if you wanted to sell it (Financial Report Objective). But whether you’re allowed to park the bike in certain areas, or the rules for riding it on streets, are separate issues (Compliance Objective). Locking up the bike won’t necessarily help with those other rules.可以將保護資產想像為鎖自行車。鎖住自行車確保您需要時它在那裡（運營目標）並且如果您想賣它，其價值被正確代表（財務報告目標）。但是您是否允許將自行車停在某些區域，或騎它在街道上的規則，是單獨的問題（合規目標）。鎖自行車不一定有助於那些其他規則。
Financial statement as sessions include:
1. Valuation, Location, and accuracy; completeness, and understandability of presentation and classification
2. Understandability of presentation and classification; independence, integrity, and objectivity; and rights and obligations.
<1>
coveup
NO R(right and obligations)
Satisfied mean per unit sampling statistical technique that may be more efficient than unstratified into you because it usually:
1. increase the variability items in a stratum by grouping sample units with similar characteristics
2. procedures an estimate having a desired level of precision with a small sample size.
<2>
1–> stratified sampling reduces the variability amount items in a stratum
In performing a search for unrecorded retirements for fixed assets:
1. analyze the repair maintenance account, and then tour client’s facilities
2. inspect the property ledger and the insurance and tax records, and then tour the client’s facilities.
<2>
1–> is used to identifying transactions that should have been capitalized versus expensed. (unrecorded addition)
doubt about ability to continue as a going concern and report disclosure was adequate. the accountant should:
1. may, what is not required to include and emphasize of matter paragraph
2. Should withdraw from the engagement
<1>
sanctions may be imposed by the PCAOB.
1. finacial penalties
2. suspension or revocation of PCAOB registration
3. required continuing professional education courses.
<1,2,3>
Mnemonic:
“FSPC.”
F for Financial penalties.經濟處罰。
S for Suspension.暫停。
P for revocation of PCAOB registration.撤銷 PCAOB 註冊。
C for required CPE courses.
Which would be performed in the planning phase of the financial statement audit?
1. Make inquiries of a client’s lawyer concerning pending litigation
2. Compare financial information with non-financial operating data
<2>
1–> should be done in regarding contingencies
U.R.T.G.P.
U for Understand the Business
R for Risk Assessment
T for Talk to Management
G for Gather Previous Audit Info
P for Preliminary Analytical Procedures & Decide Resources
To make it memorable, you can think of it as:
“U R The Great Planner!”
- deadline for completion of all the documentation of a nonissuer/issuer
- required retention period under PCAOB
- required retention period under SAS for nonissuers
- 60/45 days after the report release date
- 7years
- 5years
In assessing her objectivity of internal auditors, but independent, a CPA who is auditing entities, financial statement is most likely would consider the
1. the internal auditing standards developed by the Institute of Internal Auditors
2. Test of control activities that would detect errors and fraud.
<1>
2–> validate the effectiveness of the controls.
當註冊會計師（CPA）審計一個實體的財務報表並評估內部審計員的客觀性時，最相關的因素是：
- 由內部審計師協會（IIA）制定的內部審計標準。
這些標準非常重要，因為它們為內部審計的專業實踐提供了框架，並包括了獨立性、客觀性和適當專業關懷等屬性。註冊會計師可能會評估內部審計員是否遵守這些標準，這將影響註冊會計師對其客觀性和可靠性的判斷。
測試能夠檢測錯誤和欺詐的控制活動（選項2）在審計中也很重要，但它主要關注於實體內部控制系統的有效性，而不是直接評估內部審計員的客觀性。因此，對於特別評估內部審計員的客觀性而言，由內部審計師協會制定的內部審計標準將是最相關的因素。
In auditing a client’s retained earnings account, an auditor should determine whether there are any restrictions on retained earnings that we sold from loans, agreements, or state law. this procedure is designed to corroborate management’s financial statement of assertions with respect to:
1. understandability of presentation and classification.
2. audit risk and materiality
<1>
In simple terms: Think of auditing like a medical check-up. When the doctor is checking your blood pressure, they’re focused on getting that specific reading accurately. While they’re aware of overall health risks (like the audit risks) and the importance of certain readings (materiality), in that moment, their primary concern is to ensure the blood pressure reading is accurate and understandable.
which of the following controls most likely would help ensure that all credit sales transaction of an entity are recorded?
1. Accounting department supervisor independent reconciles the accounts receivable subsidiary ledger to the accounts receivable control account monthly
2. The billing department supervisor sent copies of approved sales orders to the credit department for comparison to authorize credit limits and current customer account balances
<1>
2–>ensuring sales are made within authorized credit limits.
Which off the following controls would be most effective in assuring that recorded portrait purchases are free of material errors？
1. purchase orders, receiving reports, and vendor’s invoices are independently matched in preparing vouchers.
2. vendor’s invoices are comprared with purchase orders by an employee who is independent of the receiving department
<1>
第一個控制通常更有效，確保記錄的購買免於重大錯誤。通過匹配三個關鍵文件，它提供了更全面的檢查，確保公司不僅訂購和開具賬單的項目相同，而且實際上也收到了。這三方匹配減少了多付或未收到商品的付款的風險。第二個控制是好的，但範圍較小，因為它只涉及兩方匹配。
The element of all the planning process most likely to be agreed-upon with the client before implementation of the audit strategy is the determination of
1. the timing of inventory observation procedures to be performed.
2. pending legal matters to be included in the inquiry of the client’s attorney
<1>
1–>When auditors plan an audit, they need to set a date to physically check the client’s inventory. This date needs to be agreed upon in advance with the client to make sure everyone is prepared.
2–>while legal matters don’t have a specific “date” to be scheduled like the inventory observation.
When an auditor concurrence with a change in accounting principle, what should be changed in audit report?
Add an emphasize of matter Paragraph.
which is not pertain to the control environment?
1. management’s philosophy and operating style
2. the accounting recorcds
<2>
the control environment includes:
1. communication and enforcement of integrity and ethical value
2. commitment to competence
3. participation of those charged with governance
4. organizational structure
5. management’s philosophy and operating style
6. assignment of authority, responsibility, and accountability
7. human resource policies and practices
Title: “The Integrity Ship’s Journey”
In a land of corporations, the “Integrity Ship” stood out for its governance and ethics. Captain Ethos led with a strong moral compass, emphasizing integrity and ethical behavior. First Mate Competent ensured crew skills and knowledge. The Steering Committee, with experienced sailors, provided oversight and participated in decisions. The ship had a clear structure; each role was well-defined, mirroring the company’s organizational structure. Captain Ethos and his officers managed with a collaborative, cautious style. The Quartermaster, Mr. Responsible, assigned clear duties and accountability. Lastly, Ms. HR managed human resources, ensuring fair practices and crew welfare. Each element of Integrity Ship’s journey represents a component of the control environment.
Now, let’s translate this into Traditional Chinese:
標題：「誠信號的旅程」
在一片公司林立的土地上，「誠信號」以其治理和道德標準脫穎而出。船長Ethos以堅定的道德指南針領導，強調<誠信和道德>行為。大副Competent確保船員具<備技能和知識>。由經驗豐富的水手組成的指導委員會提供監督並<參與決策>。這艘船擁有清晰的結構；每個角色都被明確定義，反映了公司的<組織結構>。Ethos船長和他的官員們採用合作、謹慎的<管理風格>。軍需官Mr. Responsible分配清晰的<職責和責任>。最後，Ms. HR管理<人力資源>，確保公平的實踐和船員福祉。誠信號的每一個旅程元素都代表了<控制環境>的一個組成部分。</控制環境></人力資源></職責和責任></管理風格></組織結構></參與決策></備技能和知識></誠信和道德>
which if not a primary characteristic associated with audit risk?
1. it is a risk that the auditor may fail to detect a client’s deceptive practices which may result in a misstatement of the financial statements.
2. audit risk arises because the auditor obtains only reasonable assurance that the client’s financial statements are not materially misstated.
<1>
deceptive practices 詐欺行為
1–> fraud risk not audit risk
If an auditor checks a company’s equipment value in the middle of the year without looking at how well the company’s systems prevent mistakes, what extra work do they need to do to make sure the value is still right at the end of the year?
1. Substantive procedures for the pay rate between the interim date and the balance sheet date
2. Test of controls for the period between the beginning of the physical year and the interim date
<1>
將審計結論從中期日延伸至資產負債表日是審計的標準做法。 當審計師在中期日期進行測試時，他們需要考慮從該日期到年終的期間，以確保截至年終日期的財務報表也得到公允列報。
A primary advantage of using generalized audit software packages
1. Assess information stored on computer files while having a limited understanding of the client’s hardware and software features
2. Substantive the currency of data through self-checking digits and hash totals
<1>
1–> Check Client’s Computer Data Easily
2–>Ensure Data Accuracy
there is reasonable justification for the change from engagement to a review, the accountants review report should include reference to
1. Scope limitigation that cause the change engagement
2. Original engagement that was agree to
no-no
If the accountant concludes that there is reasonable justification to change the engagement, accountants or original engagement report, should not include reference to the original engagement to any audit process produced that may have been performed or through the scope limitation that resulted in the changed engagement
which is correct
1. in order to test existence as sessions an auditor may select a sample of items and trace from their corresponding source documentation to corresponding account records
2. In order to ensure that an asset has not been overstated an auditor may wanted to vouch to source documentation
<2>
1–> from financial statement records to source documentation
Existence = Top-Down (Is what’s claimed actually there?)
Completeness = Bottom-Up (Did everything get recorded?)
A senior auditor conducted a dual-purpose test on a client’s invoice to determine whether the invoice was approved and asserttion the amount and other terms of the invoice.
what should the auditor performed?
1. substantive procedures and analytical procedures
2. tests of controls and test of details
<2>
The senior auditor checked a client’s invoice for two reasons:
1.To see if it was approved.–>test of control
2. To make sure the details and amount on the invoice were correct.–> test of detail
a company over state it’s cash position by wire transaction. How should the auditor detect this error?
1. Performing monthly reconciliation of all banks accounts
2. Requiring internal auditors to perform analytical procedures on cash balance
<1>
2–> the timing of cash payments and receives can vary period to period causing variability
in connection with an auditor of a non-inssuer auditor,an auditor would ordinarily use an engagement letter to:
1. assert that a properly planned audit will detect and identify all material misstatements.
2. specify any arrangements concerning the involvement of the company’s internal auditors on the audit
<2>
Here’s the translation into traditional Chinese:
委託書是一份正式文件，定義審計師和客戶之間的協議，概述審計工作的範疇、雙方的責任，以及有關審計任務的其他相關詳情。
在這兩個選項中：
委託書通常不會“聲稱一個妥善計劃的審計將檢測並識別所有重大錯誤”。由於固有的限制，沒有審計可以提供檢測所有重大錯誤的絕對保證，審計師非常小心不要過度承諾。
委託書可能“指定有關公司內部審計師參與審計的任何安排”。這是委託書的更典型組件。它將詳細說明內部審計師如何協助或外部審計師可能依賴他們工作的哪些領域，確保角色和責任的清晰性。
因此，在所提供的選項中，委託書的更精確目的是：
指定有關公司內部審計師參與審計的任何安排。
Least assurance about the operating effectiveness of the control activity:
1. inquiry of client personnel
2. preparation of system flowcharts
<2>
1–> inquiry, inspection, observation are all test may be used to evaluate the operating effectiveness of a control
find out subsequent events
- Perform a search for and recorded liabilities
- Review client bank reconciliations
- Review management representation letter
<3>
the best definition of control risk:
1. the risk of detecting misstatements that are material to the MD&A presentation taken as a whole
2. the risk that material misstatement in the MD&A presentation will not be prevented in a timely manner
<2>
1–> both intentional and unintentional
an auditor likely would add an other-matter paragraph when:
1. current period financial statements are audited and presented in comparative form with reviewed financial statements from the prior period.
2. the auditor concludes that substantial doubt remains about the entity’s ability to continues as a going concern for a reasonable amount of time.
<1>
<other>不太重要
Think of them as "Outside and Beyond" the core financial statements.
DRIP
1. Different Years, Different Checks前一年沒有呈現的，下一年要表現
2. Report Outside the Financials
3. important Changes in Accounting Methods
4. Prior Info Presented Differently: 先前資訊的呈現方式不同
2-->emphasis-of-matter paragraph
<emphasis-of-matter>. 強調重要
Think of them as drawing attention to "Specific Points Within" the financial statements.
GLUC
1. Going Concern Issues
2. Lawsuits
3. Unusual Transactions
4. comparative figures(Major Events After Year-End)
</emphasis-of-matter></other>
which would be more reliable?
1. Bank confirmation receipt from the client
2. Accounts receivable confirmation sent directly to the auditor.
<2>
2–> and accounts receivable confirmation that is send out by the auditor, and received back from the customer is the most valid evidence obtained
the group auditor decides not to refer to the component of the auditor, who audited a subsidiary of the group auditors. Client investigation. The group auditor most likely would:
1. Determines the type of work to be performed by the group auditor on the financial information of the component
2. Add an emphasis of matter-paragraph to the auditor’s report, indicating the subsidiary’s financial statements are not material to the consolidated to financial statement
<1>
1–>In audit terms, this means that if the main auditor (group auditor) decides not to mention the work of the other auditor (component auditor) on a subsidiary, they need to decide how closely they’ll check that work and if they need to do any extra work themselves on that subsidiary’s financial info.
2–> not a typical reason to add an emphasis-of-matter paragraph
<other> DRIP
1. Different Years, Different Checks
2. Report Outside the Financials
3. Important changes in Accounting Methods: Changes in accounting policies or methods that are significant but do not affect the current period's financial statements would be mentioned in this section.
4. Prior Info Presented Differently: 先前資訊的呈現方式不同
<emphasis-of-matter>. GLUC
1. Going Concern Issues
2. Lawsuits
3. Unusual Transactions
4. comparative figures(Major Events After Year-End)
5. change in accounting principle have materially affect the financial statements
**subsequently discovered fact lead to change in audit opinion may present in both!
</emphasis-of-matter></other>
what would use variables sampling?
1. discover whether misstatements exist in inventory records
2. estimate whether the dollar amount of inventory is reasonable
<2>
V in VA (Variable) is about Value or amounts.
A in VA (Attribute) is about specific Attributes or characteristics or yes/no answers.
which factor would consider in evaluating the control environment for an audit client?
1. organizational structure used for tax purposes
2. the ethical values demonstrated by management
<２＞
在評估審計客戶的控制環境時，需要考慮的因素是：
2. 管理階層展現的道德價值。
控制環境包含組織高層的基調，包括管理階層對道德價值、誠信的承諾、對內部控制的重視。 管理階層的道德價值和行為在設定組織的整體基調和文化方面發揮著至關重要的作用，而這反過來又能顯著影響內部控制的有效性。
另一方面，在評估審計客戶的控制環境時，用於稅務目的的組織結構（選項 1）並不是主要因素。 它更多地涉及稅務規劃和合規性，這是組織運營的一個獨立方面。
what would use attribute sampling?
1. selecting receivables for confirmation of account balance
2. identifying entries posted to incorrect accounts
<2>
Selecting receivables for confirmation of account balance:
- This is about verifying a specific value or amount, not about checking for a specific characteristic. Thus, it aligns more with variable sampling.
Identifying entries posted to incorrect accounts: - This aligns with attribute sampling. The auditor is checking whether an entry has the attribute of being correctly posted (yes or no). If it’s incorrectly posted, then it possesses the attribute being tested for.
V in VA (Variable) is about Value or amounts.
A in VA (Attribute) is about specific Attributes or characteristics or yes/no answers.具體屬性或特徵或是/否答案
An auditor to obtain an initial understanding of internal control, sufficient to assess the result of material misstatement of the financial statements an auditor would most likely perform which of the following procedures?
1. Analytical procedures to determine the need of specific controls
2. Risk assessment procedures to evaluate the design of relevant controls
<2>
1–>
This is like looking at the neighborhood’s crime statistics. It might tell you if there’s a lot of crime, but it won’t directly show you how secure this specific house is.
2–>
This is like walking around the house, checking if windows and doors lock properly and if there’s a security alarm. You’re directly assessing how well the house is protected.
which would not lead the auditor to assess inherent risk at a high level?
1. The company has elected to convert their invention costing method from LIFO to FIFO
2. The company has made substantial revisions to their credit policy, allowing for more customers to qualify for financing out of large purchases. The result has been earth 45% increase in revenue.
<1>
1–> one time thing
which type of evidence would be most reliable?
1. analytical procedures
2. confirmation of account information
<2>
1–> Analytical procedures provide for auditor with direct personal knowledge, but because this procedure is often based on internal accounting data for evidence obtained, is not as reliable as that obtained from confirmations
What would be included in planning of financial statement audit?
1. determine the extent of involvement of the client’s internal auditors
2. scan the client’s journal and lectures to identify any unusual transactions
<1>
2–>the auditor is likely to scan the client’s journals and managers to identify any unusual transactions after the planning stage
what’s the audit purpose most directly served by obtaining an understanding of an entity?
1. to assist the auditor accurately interpret information obtained during an audit
2. to enable the auditor to accurately identify significant deficiencies
<1>
1–>This is like you understanding how each toy should look.
2–>This is like you trying to find the big problems in the toys.
When you test the internal controls are for a computerized accounting system, which is true of the test data approach?
1. Test later a process with the clients computer and the results are compared with the auditors pre-determined results
2. test data are coded to a dummy subsidiary so they can be extracted from the system under actual operating conditions
<1>
測試資料方法是指使用客戶端的應用程式來處理一組測試資料的技術。 其結果已由審核員完成。 如果客戶程序有效運行，則應產生相同的結果，由審計員決定。
2–>
使用虛擬帳戶來測試控制通常與整合測試設施方法相關，而不是與傳統的測試資料方法相關。
在整合測試設施（ITF）方法中，在實際系統中建立虛擬帳戶，並透過這些帳戶處理測試事務以評估系統的效能和控制。 這種方法允許審計人員以更整合的方式測試系統並評估它如何處理真實數據。
reviewed board of director minutes for authorization of new debt financing.
- auditor procedure?
- substantive procedure/test control
- inspection
- test of controls
selected various voucher packages that had been approved and matched the invoice, purchase order, and receiving report.
- auditor procedure?
- substantive procedure/test control
- reperformance
- test of control
the PCAOB consists of exactly ? CPAs and ? non-CPAs
2+3
a compliance audit is based on management’s assumption of responsibility Except:
1. maintaining effective controls that provide absolute assurance that the entity administers programs in compliance with related requirements
2. taking appropriate corrective actions on audit findings,
<1>
1–> absolute assurance –> impossible
be included in a management representation letter as a specific representation?
1. the competency and objectivity of the internal audit department
2. information concerning fraud by the CFO
<2>
1–> auditor is required to do so but not management
2–>在管理階層陳述信中，揭露有關涉及管理階層成員、在內部控制中發揮重要作用的員工和其他個人的實際詐欺或涉嫌詐欺的資訊確實很重要，特別是當此類詐欺對財務產生重大影響時聲明。 這對於透明度和確保審計師了解可能影響財務報表準確性的任何詐欺活動至關重要。
in order to test the valuation assertion related to the client’s stockholders’ equity, the auditor may do:
1. perform inquiries of management regarding any appropriations of retained earnings
2. analyze the client’s retained earnings account by reviewing the propriety of the direct entries to the retained earnings account starting with the date of the previous audit
<2>
While performing inquiries of management (Option 1) can provide valuable information, Option 2 involves a more direct and substantive audit procedure specifically related to the valuation of stockholders’ equity.
which is correct about a documentation requirement in accordance with GAS?
1. audit documentation should contain sufficient information so that supplementary oral explanations are not required.
2. the auditor should obtain written representations from management acknowledging responsibility for correcting instances of fraud, abuse and waste
<1>
1–>This means that the audit documentation should be comprehensive and clear enough that someone reviewing it can understand the audit work without needing additional verbal explanations.
選項 2 不是 GAS 下的標準檔案要求。 雖然審計師可以從管理層獲取有關財務報表和內部控制等各種事項的書面陳述，但獲取與糾正欺詐、濫用和浪費特別相關的書面陳述並不是標準的文件要求，儘管在某些情況下可以考慮這樣做
An auditor conducting a compliance audit will design and perform additional audit procedures in response to the assessed risk of material noncompliance these procedures will include test of controls if:
1. Tests of controls are required by the government mental governmental audit requirements.
2. The auditor has determined a deficiency in the design of internal control over compliance.
<1>
test of operating effectiveness of controls may be required if any one of the following
RUS”
1.Risk Assessment Includes Controls: If the auditor’s risk assessment talks about controls, consider tests of controls.
- Unsure from Substantive Procedures: If substantive procedures don’t give enough evidence, you may need tests of controls.
3.Governmental Requirements
Which is correct in regards to reporting being another auditor is involved in an integrated audit?
1. the auditee decides whether the other auditor is referenced in the auditor’s report
2. The principal auditor decides whether the other auditor is referenced in the auditor’s report
<2>
The principal auditor, who has overall responsibility for the audit engagement, decides whether to reference the work of the other auditor in the auditor’s report. This decision is typically based on the level of involvement and responsibility of the other auditor in the audit engagement.
An auditor had set the materiality level for the financial statement as a whole at $125,000. Which of the following may statement with the auditor most likely consider material?
1. The client did not disclose $45,000 of related party transactions in the footnotes
2. the client’s estimate of the allowance of doubtful accounts is $40,000 more than the auditor’s estimate
<1>
Failure to disclose related party transactions could affect users’ understanding of the company’s financial relationships and transactions.
Even though that amount is lower than $125,000
What should be included in the accountant documentation of a review engagement?
1. the internal auditor’s inspection reports of the level of oil reserves
2. A memo on discussion with the CFO regarding a suspected kiting scheme
<2>
1–> not required to perform in review engagement
Learn - Assess - Check - Talk - Report
the key steps in a review engagement:
Learn: Understand the client’s business.
Assess: Assess risks and do basic checks.
Check: Look for unusual things in the financial data.
Talk: Communicate with the client and check financial statements.
Report: Write a review report with limited assurance.
If an accountant is performing a review engagement for a non-inssuer and considers, it necessary to communicate a matter that is not presented in the financial statements then to count accountant should include this information in which paragraph of the review report?
1. For opinion paragraph
2. the other matter Paragraph
3. the emphasis of matter paragraph
<2>
<other> DRIP
1. Different Years, Different Checks
2. Report Outside the Financials
3. Important changes in Accounting Methods: Changes in accounting policies or methods that are significant but do not affect the current period's financial statements would be mentioned in this section.
4. Prior Info Presented Differently: 先前資訊的呈現方式不同
2-->emphasis-of-matter paragraph
<emphasis-of-matter>. GLUC
1. Going Concern Issues
2. Lawsuits
3. Unusual Transactions
4. comparative figures(Major Events After Year-End)
5. change in accounting principle have materially affect the financial statements
**subsequently discovered fact lead to change in audit opinion may present in both!
</emphasis-of-matter></other>
GAGAS prescribe additional standards on
1. direct reporting of illegal acts
2. reporting on internal controls
<1,2>
AICPA creat SAS(Statement on Auditing Standards)
SAS is the base, like the foundation of a house (private sector audits).
GAGAS is the extra layer added on top for government-related audits.
GAGAS has two special blocks:
one for reporting illegal stuff and
one for reporting on how they handle money inside.
which can prevent the improper disposition of equipment?
1. A separation of duties between those authorized to dispose of equipment and those authorized to approve removal work orders
2. a periodic analysis of the scrap sales and the repairs and maintenance accounts
<1>
2–> can detect but can not prevent
I’m confirming a client accounts receivable in prior years, an auditor discovered many differences between recorded account, balance, and confirmation replies. These differences are resolve and were not misstatements. in defining the sampling unit for the current year auditor most likely would choose which one:
1. individual invoices
2. small account balance
<1>
如果審計師發現往年記錄的帳戶餘額和確認答覆之間存在許多差異，但這些差異已解決並且不被視為錯報，並且審計師現在正在選擇本年度的抽樣單位，那麼選擇個人會更合適發票作為抽樣單位。
原因如下：
- 與小額帳戶餘額相比，個人發票提供更詳細和具體的分析。 透過檢查單張發票，審計員可以更深入地了解交易並驗證記錄金額的準確性。
- 由於先前的差異已解決，因此有必要進行更詳細的檢查，以確保個別交易的準確性並避免任何潛在的誤報。
因此，在此背景下，審計人員會選擇個別發票作為當年的抽樣單位，進行更徹底的檢查，以驗證特定交易的準確性。
A CPA is considering whether to accept an engagement to prepare a financial statement for a new client, which is correct regarding the independence of the CPA?
1. The CPA should obtain management’s understanding regarding the benefits of an accountant being independent of a client
2. the CPA is not required to make a determination of whether the CPA is independent of the client
<2>
So, nonattest services are about providing assistance and advice without giving an official thumbs-up on the accuracy of financial information.
a client maintains perpetual inventory records in both quatities and dollars.
if the assessed level of control risk is high, an auditor would:
1. request the client to schedule the physical inventory count at the end of the year
2. increase the extent of test of controls of the inventory cycle
<1>
2–> would increase the extent of substantive testing not the extent of test of controls
As part of the current year’s audit, the auditor sent out client customer confirmations I received back a number of confirmation responses with exceptions. After investigating further, the auditor would be most concerned with which of the following reasons for the confirmation expectations?
1. A deficiency in accounts receivable internal control, resulted in client reporting errors.
2. There was a clerical error in the confirmation made by the auditor.
<1>
1–>雖然這兩種情況都不理想，但客戶對應收帳款的內部控制缺陷導致報告錯誤比審計師在確認中出現的文書錯誤更令人擔憂。 原因是前者顯示客戶的會計和控制流程中存在系統性問題，這可能會影響其他交易和餘額，而不僅僅是已確認的項目。 這可能導致財務報表出現重大錯報。
2–> clerical error筆誤
an auditor should design the written audit plan so that:
1. each account balance will be tested under either test of controls or tests of transactions
2. the audit procedures selected will achieve specific audit objectives
<２＞
When designing the audit plan, it’s essential that the procedures selected are directly tied to achieving specific audit objectives. These objectives might include verifying the existence, completeness, valuation, rights, obligations, presentation, and disclosure of specific account balances or transactions. The audit plan should clearly outline how each procedure will help in obtaining audit evidence and meeting these objectives.
選項 1「每個帳戶餘額將在控制測試或交易測試下進行測試」並不完全準確。 在典型的審計中，審計師將評估控制的設計和運作有效性（控制測試），並執行實質程序，其中可以包括細節測試（帳戶餘額）和交易測試。 此外，並非每個帳戶餘額或交易都必須經過控制測試和交易測試。 測試的程度（無論是控制、交易或餘額）通常取決於審計師的風險評估和對控制的依賴。 因此，雖然這個說法有一定的真實性，但它不如第二個選項那麼全面或準確。
an auditor would most likely verify that interest earned on bond investment by:
1. Voaching the receive and deposit of interest checks
2. recomputing of the interest earned on the basis of face amount, interest rate, and period held
<2>
recomputing interest earned–> auditing interest earned on bond investments
What is in compliance with the requirements governing major federal financial assistance programs under the single audit act, the auditor’s consideration of materiality differs from the materiality under general excepted auditing standard. under the Single Audit Act, materiality is :
1. Determine separately for each major federal financial assistance program
2. Decided in conjunction with the auditor’s risk assessment
3. calculation in relation to the financial statements taken as a whole
<1>
2–> Materiality must be determined before risk is assessed
3–> under GAAS, is correct. under GAGAS materiality levels may be lower due to the public accountability of the entity, the various legal requirements, and the visibility and sensitivity of governmental programs, activities, and functions
to which of the matters would materiality limits not apply when obtaining written client representations?
1. information about related party transactions
2. instances of fraud involving management
<2>
當審計師收到客戶的書面陳述時，他們通常有一個「重要性」門檻，這意味著他們可能會忽略較小的問題，因為這些問題的重要性不足以改變某人對財務狀況的理解。 然而，當涉及到詐欺行為時（尤其是涉及公司經營者的詐欺行為），不存在「小到無所謂」的情況。 因此，任何涉及管理層的詐欺事件總是很嚴重，無論看起來多麼輕微。 另一方面，與關聯方交易的資訊可能需要考慮重要性，具體取決於交易的性質和重要性。
which would least likely indicate the existence of related party transactions?
1. writing off obsolete inventory to NRV just before year-end.
2. borrowing funds at an interest rate significantly below prevailing market rates.
<1>
選項 1，「在年底之前將過時的庫存註銷至 NRV（可變現淨值）」可能表明了各種情況，例如潛在的盈餘管理或庫存估值問題，但它並不一定表明存在關聯方交易。
A practitioner has been engaged to apply agreed-upon procedures in accordance with SSAE, to prospective financial statements, which of the following conditions, must be met for the practitioner to finalize the engagement?
1. The practitioner takes responsibility for the sufficiency of the agreed-upon procedures
2. the engaging party that procedures performed were appropriate to meet the intended purpose of the engagement
3. the prospective financial statement include a summery of significant accounting policies
<2>參與方確保所執行的程序適合滿足參與的預期目的。
1–>
The practitioner does not take responsibility for the sufficiency of the procedures; that responsibility lies with the engaging party.
3–> should include a summary of significant assumptions, not a summary of significant accounting policies
in evaluating the reasonableness of an entity’s accounting estimates, an auditor most likely concentrates on methods and significant assumptions that are:
1. deviation from historical patterns
2. objective and not susceptible to bias
<1>
1–>偏離歷史模式
2–> 客觀，不受偏見影響。記住單詞就可解題
which is not used in analytic procedures when performing tests related to the occurrence of sales transactions and the accuracy of accounts receivable?
1. purchase order number
2. customer account identification
<1>
1–> should be used in an expenditure cycle but not revenue cycle
related to revenue cycle:
1. invoice amount
2. sales order quantity
3. customer account identification
how should we verify the valuation of marketable securities at the balance sheet date?
1. Compare the prices of the securities to publish closing price at the balance sheet date
2. Observe the inventory count of all securities at the balance sheet date
<1>
有價證券通常以其公平市場價值進行估值，可以透過參考證券交易所或其他可靠的金融市場來源公佈的收盤價來確定。
