Term
| What are some things Auditors should put on their reminder list? |
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Definition
- Review of prior years workpapers
- Analytical Review (like performed in case from casebook)
- Checklist to make sure all work is performed
- Requires sign off and date to make sure work is completed and documented – DO NOT Quick Tick! |
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Term
| What are some Audit Evidence Decisions to consider? |
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Definition
1. Which audit procedures to use
2. What sample size to select for a given procedure
3. Which items to select from the population
4. When to perform the procedures (timing) |
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Term
| What is included in the Audit Program? |
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Definition
It includes a list of the audit procedures the auditor considers necessary.
- Sample sizes
- Items to select
- Timing of the tests
Most auditors use computers to facilitate the preparation of audit programs. |
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Term
| What are two determinants of Persuasive Evidence |
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Definition
| Appropriateness and Sufficiency |
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Term
| What are the Six Characteristics of Reliable Evidence? |
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Definition
1. Independence of provider
2. Effectiveness of client’s internal controls
3. Auditor’s direct knowledge
4. Qualification of individuals providing the information
5. Degree of objectivity
6. Timeliness |
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Term
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Definition
In making decisions about evidence
for a given audit, both persuasiveness
and cost must be considered. The auditor’s goal is to obtain a
sufficient amount of appropriate
evidence at the lowest total cost. |
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Term
| What are some types of Audit Evidence? |
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Definition
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Term
| What is Physical Examination? |
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Definition
It is the inspection or count by the
auditor of a tangible asset. This type of evidence is most often associated with inventory and cash. |
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Term
What are some ways of confirmation for these:
Assets:
Cash in bank
Accounts receivable
Notes receivable
Owned inventory out on consignment
Inventory held in public warehouses
Cash surrender value of life insurance
Liabilities:
Accounts payable
Notes payable
Advances from customers
Mortgages payable
Bonds payable
Owner's Equity:
Shares outstanding
Other Information:
Insurance coverage
Contingent liabilities
Bond indenture agreements
Collateral held by creditors |
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Definition
Bank
Customer
Maker
Consignee
Public warehouse
Insurance company
Creditor
Lender
Customer
Mortgagor
Bondholder
Registrar and transfer agent
Insurance company
Bank, lender, and client’s legal counsel
Bond holder
Creditor |
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Term
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Definition
It is the auditor’s inspection of the
businesses documents and records. Both internal and external. |
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Term
| What are some analytic procedures? |
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Definition
- Understand the client’s industry and business
- Assess the entity’s ability to continue as a going concern
- Indicate the presence of possible misstatements in the financial statements
- Reduce detailed audit tests |
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Term
| What are inquiries of the person? |
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Definition
| It is the obtaining of written or oral information from the client in response to questions from the auditor. |
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Term
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Definition
| It involves rechecking a sample of calculations made by the client. |
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Term
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Definition
| It is the auditor’s independent tests of client accounting procedures or controls that were originally done. |
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Term
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Definition
It is the use of the senses to assess client activities. The auditor may tour the plant to obtain a general
impression of the client’s facilities. |
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Term
| What are some Appropriateness of Types of Evidence |
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Definition
- Type of evidence
- Independence of provider
- Effectiveness of client’s internal controls
- Auditor’s direct knowledge
- Qualifications of provider
- Objectivity of evidence |
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Term
| What is the Audit Documentation? |
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Definition
Audit documentation is the principal record of auditing procedures applied, evidence obtained, and conclusions reached by
the auditor in the audit. |
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Term
| What does the Sarbanes-Oxley Act do? |
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Definition
The Sarbanes-Oxley Act requires auditors of public companies to prepare and maintain audit working papers for a period of no
less than seven years. |
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Term
| What are Permanent Files? |
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Definition
These files are intended to contain
data of a historical or continuing
nature pertinent to the current audit. |
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Term
| What are some examples of current files? |
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Definition
- Summary of procedures
- Examination of supporting documents
- Informational
- Outside documentation |
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Term
| What must be done in Preparation of Audit Documentation? |
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Definition
- Each audit file should be properly identified
- Documentation should be indexed and cross-referenced
- Completed documentation must clearly indicate the audit work performed
- It should include sufficient information
- It should plainly state the conclusions reached |
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Term
| What are some of the effects of E-commerce |
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Definition
- Audit evidence is increasingly in electronic form
- Auditors must evaluate how electronic information affects their ability to gather evidence
- Auditors use computers to read and examine evidence
- Software programs are typically Windows-based |
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