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Yaeger AUD > Quiz Mods 1-3 > Flashcards

Quiz Mods 1-3 Flashcards

(69 cards)

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0
Q

Entity level controls include:

Controls related to…

A

Control environment

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1
Q

Regarding the company’s annual stockholder meeting is…

A

Not an entity level control

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2
Q

Entity level controls include:

Controls over…

A

Management override

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3
Q

Entity level controls include:

The company’s…

A

Risk assessment process

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4
Q

Entity level controls include:

Centralized processing and…

A

Controls, including shared service environments

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5
Q

Entity level controls include:

Controls to monitor…

A

Results of operations

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6
Q

Entity level controls include:

Controls to monitor other controls including activities to monitor…3

A

1 internal audit function

2 audit committee

3 self assessment programs

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7
Q

Entity level controls include:

Controls over the…

A

Period end financial reporting process

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8
Q

Entity level controls include:

Policies that address…2

A

Significant business control and risk management practices

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9
Q

Additions may be made to audit documentation…

A

After report release date

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10
Q

Deletions and discarding of audit documentation are…

A

Not allowed after report release date

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11
Q

Any additions made to audit documentation must include…3

A

1 date info was added

2 name of person who prepared the additional documentation

3 the reason for the addition

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12
Q

The purchase and cash disbursements cycle requires that…3

A

1 procurements are properly authorized
2 goods and services actually received
3 invoice details regarding vendor, price, quantities, terms and
Arithmetic are correct

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13
Q

The purchase and cash disbursements cycle requires that
1 procurements are properly authorized
2 goods and services actually received
3 invoice details regarding vendor, price, quantities, terms and
Arithmetic are correct

This is best accomplished by having the accounts payable department…

A

Establish the agreement of the vendor’s invoice with the receiving
Report and purchase order

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14
Q

Accounts receivable department establishing agreement with vendors invoice

A

Invoice details are correct

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15
Q

Accounts receivable department establishing agreement with receiving report

A

Goods and services actually received

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16
Q

Accounts receivable department establishing agreement with purchase order

A

Procurements are properly authorized

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17
Q

Rather than the accounts payable department, the person preparing and signing checks (usually treasurer) would…

A

Cancel supporting documentation

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18
Q

The purchasing department would verify that…

A

Requisitions are properly completed and authorized

As well as sending copies of purchase order to receiving
department

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19
Q

Disclosure of fraudulent activities to parties other than the client’s senior management and those charge with governance is…2

A

1 Not ordinarily part of auditor’s responsibility

2 normally not permitted due to confidentiality

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20
Q

Under what circumstances is the auditor required to disclose information to outside parties 4

A

1 comply with legal/regulatory requirements
2 subpoenaed
3 to respond to successor auditor
4 with grant requirements when client’s receive governmental
Assistance

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21
Q

The auditor should communicate to those charged with governance all fraud…

A

Involving senior management and fraud that causes material

Misstatement

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22
Q

The auditor should report to those charged with governance and management…

A

Any significant deficiencies due to risk of material misstatement
Due to fraud

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23
Q

Auditor should inform the appropriate level of management of…

A

Evidence that fraud has occurred, even if matter is inconsequential

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24
AU 339 Audit Documentation entitled "Providing Access to or Copies of Audit Documentation to a Regulator" does not apply to...5
1 request from IRS 2 firm practice monitoring programs to comply with AICPA 3 state professional requirements (peer or quality reviews) 4 proceedings related to alleged ethics violations 5 subpoenas
25
The vouchers payable department should not account for...
Unused prenumbered purchase orders and receiving reports
26
Accounting for unused prenumbered purchase orders and receiving reports is the responsibility of...
Purchasing and receiving departments respectively
27
If vouchers payable employee had access to unused purchase orders and receiving reports this would...
Be inadequate segregation of duties
28
If vouchers payable employee had access to unused purchase orders and receiving reports they could...3
1 write a fake purchase order 2 confirm receipt of the nonexistent goods 3 authorize payment to themselves
29
Vouchers payable department should match...
Vendor's invoice with the related receiving report, which ensures Goods billed were received Ex. The voucher is valid
30
Vouchers payable department should approve...
``` Vouchers for payment by having an authorized employee sign The vouchers (authorization) ```
31
Vouchers payable department should indicate...
The asset and expense accounts to be debited (ensuring proper Classification)
32
The purpose of an engagement letter is to...
Help avoid misunderstanding with respect to the engagement
33
The engagement letter serves as...
The contract between client and accountant regarding terms | Of engagement
34
The engagement letter helps avoid...
Legal liability claims that the auditor did not perform work as Promised
35
While an engagement letter is not required by GAAS, it is...
Strongly recommended that such a letter be obtained for all types of engagements
36
While the successor auditor must obtain permission from the client to communicate with the predecessor auditor, this is not done in...
The engagement letter
37
Assurances from management regarding assertions in the financial statements are contained in...
The client representation letter
38
The engagement letter is not designed to...
Release auditor from liability for errors and irregularities not Detected by the audit
39
5 interrelated components of internal control
``` 1 control environment 2 risk assessment 3 information and communication 4 control activities 5 monitoring ```
40
Materiality is not...
An interrelated component of internal control
41
Control environment
Sets tone of the organization
42
Risk assessment
Entity's identification and analysis of relevant risks to achievement Of its objectives
43
Information and communication systems support the...
Identification, capture and exchange of info in form and timeframe That enable people to carry out their responsibility
44
Control activities
Policies and procedures that help ensure that management | Directives are carried out
45
Monitoring
Process that assesses the quality of internal control performance Over time
46
The quality control system of GAO auditor's should address...
Human resource policies and procedures
47
External peer review of GAO auditors is required...
Once every 3 years
48
Auditor's understanding of the entity and its environment consists of an understanding of the following aspects 5
1 industry, regulatory and other external factors 2 nature of the entity 3 objectives and strategies and the related business risks that may Result in material misstatement of financial statements 4 measurement and review of entity's financial performance 5 internal control, which includes selection and application of Accounting policies
49
Entity's accounting policies and procedures does...
Not fit into the category of industry, regulatory and other external factors
50
Relevant industry, regulatory and other external factors include industry conditions such as...3
1 competitive environment 2 supplier and customer relationship 3 technological developments
51
Regulatory environment encompasses...3
1 Relevant accounting pronouncements 2 political environment 3 environmental requirements affecting industry and entity
52
Factors that influence auditor's reliability of data 5
``` 1 origin of data 2 independence of data source 3 strength of controls in system used to develop data 4 audited status of data 5 number of sources used to develop data ```
53
The PCAOB has the authority to enforce Section 303 of SOX in...
Civil proceedings
54
Examples of discrepancies in accounting records that could be used to assess the risk of material misstatement due to fraud include: Transactions that are not recorded in...
A complete or timely manner
55
Examples of discrepancies in accounting records that could be used to assess the risk of material misstatement due to fraud include: Transactions that are not recorded in a complete or timely manner or are improperly recorded as to...4 choices
1 amount 2 accounting period 3 classification 4 or entity policy
56
Examples of discrepancies in accounting records that could be used to assess the risk of material misstatement due to fraud include: Unsupported or...
Unauthorized balances or transactions
57
Examples of discrepancies in accounting records that could be used to assess the risk of material misstatement due to fraud include: Last minute adjustments that...
Significantly affect financial results
58
Examples of discrepancies in accounting records that could be used to assess the risk of material misstatement due to fraud include: Evidence of employees' access to...
Systems and records inconsistent with that necessary to perform Their authorized duties
59
Examples of discrepancies in accounting records that could be used to assess the risk of material misstatement due to fraud include: Tips or...
Complaints to the auditor about alleged fraud
60
AU standards for fraud planning include...
Brainstorming among team members and importance of | maintaining proper state of mind
61
Examination of client records documenting use of EDP programs is an example of...
Examining records that could provide auditor info to determine if control activities are operating as designed
62
An auditor may chose to rely or not rely on the work of another auditor, in either case, the auditor should...
Inquire as to the reputation of the other auditor
63
A GAO structural threat is...
The threat that an audit organization's placement within a government entity, in combination with structure of government Entity being audited Will impact audit organization's ability to perform work and report Results objectively
64
What 7 circumstances has GAO identified that could lead to threats of independence?
``` 1 self interest 2 self review 3 bias 4 familiarity 5 undue influence 6 management participation 7 structural threats ```
65
An auditor most likely perform in planning a financial statement audit would be...
Comparing the financial statements to anticipated results
66
Inquiring with client's legal counsel, examining computer generated exception reports to verify effectiveness of internal controls and searching for unauthorized transactions are all...
Part of obtaining sufficient appropriate evidence through inspection, Observation, inquiries and confirmations
67
Mailing monthly statements to all customers with outstanding balances is the internal control, that if implemented properly, could...
Assist the client in preventing or detection misappropriation of A customer's check
68
The customer provides an independent check on the customer account balance and is a...
Source of information which is external to organization

Yaeger AUD (38 decks)

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