Planning Activities Flashcards
In-Charge auditor would have responsibility to explain to the staff assistants what?
How the results of various auditing procedures performed by the assistants should be evaluated
The auditor should establish performance nateriality at less than materiality for the financial statments as a whole to allow for the possibility of uncorrected and undetected misstatments (T/F)
True
Materiality can be appropriately described as an understanding of what is important to the fairness of the financial statements (T/F)
True
What is meant by the term “tolerable misstatement”
The application of performance materiality to a particular sampling procedure or application.
Engagement letter limits the auditor’s responsibility to detect errors and fraud (T/F)
True
The engagement letter will include a planned use of specialist (T/F)
True
Does the auditor come to an understanding related to communicating significant deficiencies in the engagement letter?
Yes
The engagement letter would include management’s acknowledgment of its responsibility for maintaining effective internal controls (T/F)
True
Supporting records are not available for review indicates what?
likely existence of material misstatement
Not having electronic evidence past a certain date could affect what?
The timing of control and substantive test
An overly complex organizational structure would increase an auditor’s concern about what?
Fraudulent Financial Reporting
A client not reconciling differences between control accounts & subsidiary records would indicate what?
Risk of Material Misstatement
An auditor should obtain what when using a specialist?
An understanding of the methods and assumptions of the specialist
What must the auditor discuss with those charged with governance regarding planning?
Planned scope and timing of engagement
Audit plan include what 3 things?
- Nature & Extent of Risk Assessment Procedures
- Nature, Timing, Extent of “further audit procedures”
- Other planned audit procedures
