Procedures to Obtain Evidence

Question 1

a specific type of inquiry that obtains representations from independent external third parties about account balances & transactions or events

Answer 1

confirmation

Question 2

verifying the mathematical accuracy of statements & schedules by adding down

Answer 2

footing

Question 3

verifying the mathematical accuracy of statements & schedules by adding across

Answer 3

cross-footing

Question 4

verifying the mathematical accuracy of statements & schedules by recalculating amounts

Answer 4

recalculation

Question 5

requesting info from knowledgeable parties both internally & externally

Answer 5

inquiry

Question 6

directional testing where the auditor examines support for what has been recorded in the records & statements

Answer 6

vouching

Question 7

inspecting or examining records, documents, or tangible assets (either physically present or through the use of remote observation tools)

Answer 7

examination/inspection

Question 8

verifying that transactions are recorded in the correct accounting period, ensuring compliance with the accrual basis of accounting

Answer 8

cutoff review

Question 9

evaluations of financial information made by a study of meaningful relationships among data, to help highlight unusual fluctuations that could be the result of errors or fraudulent omissions or overstatements

Answer 9

analytical procedures

Question 10

using professional judgment to search for large, significant, or unusual items in the accounting records

Answer 10

scanning

Question 11

the auditor independently performs procedures or controls that were originally performed as part of an entity’s internal control

Answer 11

reperformance

Question 12

comparing financial amounts from two independent sources for agreement to substantiate the existence and valuation of accounts

Answer 12

reconciliation

Question 13

the auditor looks at a process or procedure performed by others

Answer 13

observation

Question 14

directional testing that starts with the source documents & traces forward to provide assurance that the event is being given proper recognition in the books & records

Answer 14

tracing

Question 15

questioning the entity’s personnel about the understanding of what is required by the entity’s prescribed procedures & controls

Answer 15

walk-through

Question 16

performing certain procedures for the period after the balance sheet date through the date of the auditor’s report

Answer 16

subsequent events review

Question 17

list the 2 types of substantive procedures

Answer 17

tests of details
substantive analytical procedures

Question 18

evaluations of financial information made by a study of plausible relationships among both financial & nonfinancial data

Answer 18

analytical procedures

Question 19

audit procedures used to gather evidence to support the account balances as reflected in the financial statements

Answer 19

tests of details

Question 20

compare financial statement item or account balance for the current period with prior periods (low level of assurance)

Answer 20

trend analysis

Question 21

calculating ratios based on known relationships among accounts or nonfinancial information & comparing with the same ratio for prior periods (low level of assurance)

Answer 21

ratio analysis

Question 22

uses predictive model to estimate financial statement amount

Answer 22

nonstatistical predictive modeling

Question 23

advances statistical technique that often uses data from prior periods to develop a model to predict future periods

Answer 23

regression analysis

Question 24

a request that the confirming party respond directly to the auditor by providing the requested information or agreeing/disagreeing with the request

Answer 24

positive confirmation