Random Flashcards
Generalized audit software package
Select items meeting certain criteria
Embedded audit module
Section of program code that can be used to collect specific transaction data
What type of assurance do you give in a compliance audit
Negative assurance (in connection with financial statement audit)
Government audits do not form an opinion on what
Internal control - but they do report on it
The accountant may compile financial statements that omit substantially all disclosures provided that
The report clearly indicates the omission and statement that the omission is not meant to mislead
In establishing existence of long term investments
Auditor can inspect securities or confirm shares with an independent custodian
In designing an audit plan the auditor should establish objectives around
Financial statement assertions
Confirmation of receivables provides evidence regarding what
Existence
Due professional care requires what
A CPA to critically review the work done by others
A practitioners report on agreed upon procedures should contain
A description of procedures performed & related findings
Which is more reliable a bank statement or bank confirmation
Bank confirmation- less likely to be altered due to direct correspondence with auditor and 3rd party
What is independence rule for litigation
Independence is not impaired by litigation with an audit client of the dollar amount is immaterial and unrelated to audit work
What would an auditor likely do regarding valuation of trading securities
Verify from third party market prices like NASDAQ
What control reduces errors in billing
Compare totals for shipping documents with corresponding total for sales invoices
Is it acceptable to perform portions of a continuing audit at interim dates
Yes
Which events justify a departure from GAAP
New legislation and a new form of business transaction
When group auditor does NOT assume responsibility for component auditor what should they request from the component auditor
1- whether they complied with ethical requirements
2- identify financial information of the component
3- overall findings
Does the auditor have to assess control risk before performing substantive tests
Yes
Noncompliance should result in which opinion
Qualified or adverse
Make sure you know that auditors OBSERVE the inventory count they don’t PERFORM inventory count
Know this
Integrated test facility
Mixes test data with real data
Procedure to perform in pro forma FS
Determine calculations are mathematically correct
Confirmations prove what assertion
Existence
What would help identify material accounting estimates
Reading board minutes
Stratifying sampling decreases the effect of what
Variance
Auditors on big cheats need to rotate and have a time-out Pernod how often
Every 5 years