Review

Question 1

If the predecessor auditor issued a qualified opinion, what is the A’s responsibility for the CY?

Answer 1

disclose the reasons for any qualification included in the predecessor auditor’s opinion

Question 2

ratio estimation sampling method

Answer 2

based upon comparing the ratio of the BV to the audited value of sampled items. BV’s must be known

Question 3

Systematic sampling

Answer 3

random start is obtained and from there every _th item is selected

Question 4

Which duties need to be segregated of IT functions

Answer 4

Systems analysis
Programming
Computer Operations
Transaction authorization
Library functions
Data control

Question 5

What is test data used for?

Answer 5

involve the use of fake tranx to test whether the application controls are functioning properly. Used to test controls relating to missing EE numbers, time tickets with invalid job numbers, and agreements of hours per clock cards to hours on timesheets

Question 6

embedded audit module

Answer 6

a routine that is built into an application program an on-going audit function

Question 7

Check digit

Answer 7

numeric value that is computed to provide assurance that the original value has not been altered in data processing or transmission

Question 8

Worm

Answer 8

not a dance move. A computer program that replicates independently by sending itself to other systems. Good thing real worms dont do that.

Question 9

Integrated test facility

Answer 9

creating a fictitious component of an entity to process test data along with an entitys actual data

Question 10

Test data

Answer 10

testing an entitys controls by using the entitys systems to process a set of transactions containing known errors of interest to the auditor.

Question 11

compiler

Answer 11

program that converts instructions written in a particular computer language into machine-readable instructions

Question 12

Parallel simulation

Answer 12

computer assisted auditing technique in which an auditor written or controlled program is used to process client data. the results are compared to those obtained using the clients program and differences are investigated.

Question 13

What are the assertions of MD&A

Answer 13

Completeness
Consistency with the FS
Occurrence
Presentation & Disclosure

Question 14

What type of sampling would be used to estimate a dollar value?

Answer 14

sampling for variables

Question 15

Does population size have an effect on the sampling?

Answer 15

population has very little or no effect on sample size in attribute sampling.

Question 16

What is included in tests of controls

Answer 16

inquiry
inspection
observation
reperformance

Question 17

What type of sampling is discovery sampling

Answer 17

sampling for attributes

Question 18

Before applying substantive tests to an entitys AR at an interim date, an auditor should

Answer 18

assess the difficulty in controlling the incremental audit risk

Question 19

What are dual purpose tests

Answer 19

a single sample is used to test a control and to serve as a substantive test of a recorded balance or class of transactions.Select the higher sample size of that required for the 2 purposes.

Question 20

What should analytical procedures used for risk assessment include

Answer 20

Enhancing the auditors understanding of the clients business and the transactions and events that have occurred since the last audit date.
Identifying areas that may represent specific risks relevant to the audit

Question 21

What does assessing the ROMM below the maximum based on controls involve?

Answer 21

Identifying specific controls relevant to specific assertions.
Performing tests of controls to evaluate their effectiveness.

Question 22

When are SSARS used?

Answer 22

When compiling, preparing, or reviewing