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AUDIT > Memory Aids > Flashcards

Memory Aids Flashcards

1
Q

What are the 10 GAAS?

A

TIPPICANOE:
3 General Stds: Training & Proficiency; Independence; Prof. Care, Due
3 Fieldwork Stds: Planning & Supervision; Internal Controls; Corroborative Audit Evidence
4 Reporting Stds: Accting Principles in conformity w/GAAP; No new accting principles applied-Consistency; Omitted Informative Disclosures-None; Expression of an Opinion

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2
Q

What Attestation Engagements must you be independent for?

A 
ERAS:
Examinations (Audits)
Reviews
Agree-Upon procedure engagements
Special Reports
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3
Q

What type of engagements do you NOT need to be independent for?

A

Compilations (must indicate lack of independence)
Taxes
Consultations

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4
Q

What kind of financial interests will impair your independence?

A

Material Indirect
and/or
Any Direct

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5
Q

What inquiries should be made of the predecessor auditor?

A 
RIDC
Reasons for change
Integrity of Mgt
Disagreements during audit
Communication w/Mgt or those charged with gov.
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6
Q

What matters should be communicated with those charged with governance?

A 
DISAPPROVE:
Disagreement w/mgt
Illegal acts
Significant accting policies
Adjustments
Prior discussions w/ mgt
Problems obtaining evidence or emp. cooperation
Responsibilities of auditor
Other info reg. responsibilities
Views of other acctants
Estimates
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7
Q

What are the elements of the engagement letter?

A 
FACSIMILE:
Fees
Auditor's responsibility (GAAS)
Confirmation of engagement
Scope & objective of engagement
Internal Control
Mgt responsibility
Irregularities-Fraud
iLlegal Acts
Errors
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8
Q

What are the steps in planning an audit?

A 
BRAINSTOPS:
Basic discussion w/client
Review of audit docs (prev audits)
Ask about recent developments
Interim F/S
Non-audit personnel
Staffing
Timing
Outside asst (specialist)
Pronouncements (changes in A. Proc. & A. Stds)
Scheduling with the client
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9
Q

What are the 6 element of quality control?

A

HEALME
Human resources (Personnel mgt)
Ethical Req. (Independence)
Acceptance and continuance of client rel. & specific eng.
Leadership resp. for quality w/i the firm
Monitoring
Engagement performance

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10
Q

What are the objectives that Internal Control should meet?

A

ACE
Accurate & Reliable fin. reporting
Compliance with laws & regs
Effectiveness and efficiency of ops

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11
Q

What are the 5 elements of Internal Control?

A 
CRIME
Control activities
Risk assessment
Information & communication
Monitoring
Control Environment
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12
Q

What are the 7 elements of Control Environment?

A 
CHOPPER
Commitment to competence
Human resource policies & practices
Organizational structure
Participation of those charged w/gov
Philosophy of mgt & operating style
Ethical values & integrity
Responsibility assignment
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13
Q

What are the elements of Control Activities?

A 
PIPS & ARCC
Performance reviews
Information processing
Physical controls
Segregation of duties:
  Authorization
  Recording (posting)
  Custody
  Comparison
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14
Q

What ways can you document your understanding of Internal Control?

A 
FIND
Flowchart
Internal Control Questionnaire (ICQ)
Narrative or Memorandum
Decision tree/table
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15
Q

How do you test for segregation of duties (ARCC)?

A 
RIIO
Reperformance
Inspection
Inquiry
Observation
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16
Q

What are the inherent limitations:

A 
COCO
Collusion
Override by mgt
Competence
Obsolescence
17
Q

What are Managements Assertions?

A 
UPERCV
Understandability & Classification
Presentation & Disclosure
Existence or Occurrence (Vouching)
Rights & Obligations
Completeness (Tracing) & Cutoff
Valuation, Allocation, & Accuracy
18
Q

What are the Audit Procedures?

A 
ICORRIIA
Inquiry
Confirmation
Observation
Recalculation
Re-performance
Inspection of tangible assets
Inspection (examination) of records/documents
Analytical Procedures
19
Q

What are the 6 types of Internal Control Activities to question?

A 
PRAISE
Physical control
Recording
Authorization
Independent checks
Segregation of duties
Evaluate performance
20
Q

What is Sufficiency?

A

Quantity
Persuasive rather than conclusive
Cost/benefit

21
Q

What is Appropriateness?

A 
Quality
Relevance (UPERCV)
Reliability/Faithful Representation
  Sources:
  1. Auditor developed
  2. Outside
  3. Outside/Inside
  4. Inside
22
Q

What are 5 comparisons in Analytical Procedures?

A 
CRAFT
Client vs Industry
Related Accts
Actual vs Budget
Financial vs Nonfinancial
This year vs Prior year
23
Q

What 3 times may Analytical Procedures be performed?

A 
Planning (required)
Substantive testing (optional)
Overall Review (required)
24
Q

What is the current ratio?

A

current assets/current liabilities

25
Q

What is the quick ratio (acid test)?

A

Quick assets/current liabilities

Quick assets=cash, mkt. sec., & acct. rec.

26
Q

What is the receivables turnover ratio?

A

credit sales/avg account receivables

27
Q

What is the inventory turnover ratio?

A

COGS/avg inventory

28
Q

What is the Debt-Equity ratio?

A

total liabilities/SH Equity

29
Q

What do you do when you examine to look for weaknesses in work papers?

A 
CCHITF
Comment on exceptions
Conclusions
Heading
Initials & date
Tickmarks (symbols)
Foot
30
Q

What are the 3 key factors in attribute sampling to determine appropriate sample size?

A

TEA
Tolerable deviation rate
Expected deviation rate
Allowable risk of assessing RMM too low

31
Q

What are the 4 elements of a compilation report?

A 
CARD
Compiled
AICPA standards (SSARS)
Responsibility of mgt
Disclaim opinion or assurance
32
Q

What are the 8 elements of a review report?

A 
FAMILIAR
Financial Stmts being reviewed
AICPA stds (SSARS)
Mgt Representation
Inquiry & analytical procedures
Less in scope than audit
Incapable of opinion
Assurance provided (limited or negative)
Refer to US Principles

AUDIT (9 decks)

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