Nature Of Evidence 2

Question 0

What should an auditor consider when performing substantive analytical procedures between the interim date and close end year?

Answer 0

consider whether amounts of the year end date would be predictable with reason to amount, significance, and composition

Assess the difficulty in controlling the incremental audit risk meaning considering the risk that material misstatements will not be detected due to early testing (look @ effectiveness of controls, presence of business conditions/circumstances, and availability of relevant information)

Question 1

Performing substantive tests prior to the balance sheet increases or decreases the risk of material misstatements to occur?

Answer 1

Increases; doing it before decreases detection risk of detecting material misstatements

Question 2

Tests of controls

Answer 2

Verifies that segregation of duties exist and is operating effectively

Question 3

Overall review stage

Answer 3

Determine whether audit procedures affect the rmm due to fraud, adequacy of evidence gathered in response to unusual balances and whether such balances occurred due to fraud

Question 4

Effects of performing substantive tests of ending balances at an interim date?

Answer 4

Performing substantive tests of ending balances at an intern date is efficient for scheduling risk but increases detection risk

Extend conclusions to the remainder of the period by applying analytical procedures and relying on internal control