Unit 4 Flashcards
What does the AP department typically do?
Establish agreement between the receiving report and the purchase order.
What does the purchasing dept typically do?
Approve the PO and negotiate terms.
Vendors are the population for which assertion of AP?
Completeness
What is the PRIMARY purpose of a Standard Confirmation Request to financial institutions?
Corroborate info regarding deposits and loan balances
The auditor should trace bank transfers from the last part of the audit period to the next subsequent period in order to detect what kind of fraudulent activity?
Kiting
The auditor should trace PY checks listed in the cutoff statement to what?
Y/E outstanding checklist
This assertion states that all inventory on hand is reflected in the ending inventory.
Completeness
What type of analysis finds slow moving/obsolete inventory items?
Inventory Turnover Analysis
This assertion would be tested by recalculating the computation of standard OH rates.
Valuation
This assertion is tested by analytical reviews of LT Investments to assertatin the reasonableness of recorded investment in come.
Completeness
Confirming with an outside agent that holds investment securites provides assertions about…
Rights, Obligations, and Existence
Going concern should be placed in the AR even if adequately disclosed. It can either be __________ with an __________ paragraph or a(n) _________ opinion.
Unmodified/EOM paragraph or a Disclaimer
Significance, Cost of Correction, and its Effects are all (Qualitative/Quantitative) standards of misstatements.
Qualitative
Errors that are not material (must/should) be documented along with conclusions that they didn’t cause the FS to be misstated.
MUST
Refusing to furnish a management rep letter is considered a(n) ____________
Scope Limitation
