ACCT 411 Midterm 3

kyleparkinson184's version from 2015-04-30 23:59


Question Answer
Purpose of audit documentationprovide a basis for the audit, basis for review from supervisor, record of evidence and test, and proper type of audit test
Six things that affect reliability of informationQualification of provider, effectiveness of internal controls, degree of objectivity, independence, and auditors knowledge, and provided in a timely manner
Physical Examination of inventory Audit ObjectivesExistence and Accuracy
Analytical procedures audit objectivesAccuracy
Recalculation Audit ObjectivesDetail-tie in
Inquires of Client Audit ObjectivesRealizable Value
Confirmation Audit ObjectivesExistence, Completeness, Accuracy
Physical Examination of records Audit ObjectivesCompleteness and Accuracy
Documentation audit objectivesRights and Obligations
Audit ProgramList of audit procedures for an audit
Audit ProcedureInstructions for collecting information
Analytical Proceduresanalysis of financial data among financial and non financial data
Audit Documentationrecord of the audit performed
Current FilesAll files applicable to current year audit
ConfirmationThird party response on liability
Inquiryobtained written or oral information from client
InspectionExamination of the clients documents
Lead Schedule An audit schedule that contains the detailed accounts from the general ledger
Observationlooking at process performed by others
Permanent FilesFiles that contain historical data for the corporation like bond indentures
RecalculationRechecking numbers are added up correctly
ReperformanceTesting the internal control system
Tracinguse of documentation to verify that invoices are recorded
Tick Marksymbols that tell what audit procedures have been performed
unusual fluctuationvariance in what the analytical procedure said there should be.
Purpose of Analytical Proceduresassist auditor in nature, extent, and timing for work performed
Examples of analytical procedurescompare current data to previous data, compare data to expected results financials and non-financials, compare client to industry data, compare client data to own predictions
Audit StrategyOverall approach to audit considering nature of client, risk of material misstatements, clients internal controls and size.
AARAcceptable risk the auditor is willing to accept for material misstatements in the financial statements
Business RiskReliability of financial reports, effectiveness and efficiency of operations, compliance with laws and regulations
Engagement LetterA letter between auditor and client clarifying conduct of audit and services
Inherent RiskRisk predetermined before considering internal controls
Initial Auditing Planningidentify if you want to do audit by identifying reason for audit, recieving engagement letter, and developing audit strategies.

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