Term
| The amount of Audit Evidence is Based on what? |
|
Definition
| Appropriateness and cost-feasibility |
|
|
Term
| What must evidence be to be considered persuasive? |
|
Definition
| Sufficient and Appropriate |
|
|
Term
|
Definition
Received from outside the client company. -Talks to/addresses existence
-For Completeness a search is needed |
|
|
Term
| What factors influence the reliability of evidence? |
|
Definition
1) Independence of provider
2)Effectiveness of Client's Internal control
3)Auditor's direct knowledge
4)Qualifications of individuals providing the information
5)Degree of Objectivity
6)Timeliness |
|
|
Term
| What are the characteristics of a risk driven audit? |
|
Definition
-Items with a high probability of misstatement are audited.
-Balance sheet accounts are audited as close to the balance sheet date as possible
-Income Statement item balances should be over the whole period. |
|
|
Term
| What characteristic could result in a Qualified Opinion |
|
Definition
|
|
Term
| What are the 8 types of Audit Evidence |
|
Definition
-Physical Examination
-Documentation
-Analytical Procedures
-Confirmation
-Inquiries of the Client
-Recalculation
-Reperformance
-Observation |
|
|
Term
| What is the primary determinant of the appropriateness of an internal document |
|
Definition
|
|
Term
|
Definition
Using documentation to support transactions and amounts.
-Test for overstatement:
-Ledger to source document
-Tests for existence |
|
|
Term
|
Definition
Test for Understatement
-Source document to ledger
-tests for completeness |
|
|
Term
| How long does SOX require public companies to keep audit working papers for? |
|
Definition
|
|
Term
|
Definition
(Documentation)
- A reasonably detailed study of a document or record to determine specific facts about it |
|
|
Term
|
Definition
(Analytical Procedure)
- A less detailed examination of a document or record to determine whether there is something unusual warranting further investigation |
|
|
Term
|
Definition
(Documentation)
An examination of written information to determine facts pertinent to the audit |
|
|
Term
|
Definition
(Analytical Procedures)
A calculation done by the auditor independent of the client |
|
|
Term
|
Definition
(Recalculation)
A calculation done to determine whether a client's calculation is correct |
|
|
Term
|
Definition
(Recalculation)
Addition of a column of numbers to determine whether the total is the same as the clients |
|
|
Term
|
Definition
(Documentation or Reperformance)
An instruction normally associated with documentation or reperformance. The instruction should state what the auditor is tracing and where it is being traced from and to. Often an audit procedure that include the term trace will also include a second instruction, such as compare or recalculate. |
|
|
Term
|
Definition
(Documentation)
A comparison of information in two different locations. The instruction should state which information is being compared in as much detail as practical. |
|
|
Term
|
Definition
(Physical examination)
A determination of assets on hand at a given time. This term should be associated with the type of evidence defined as physical examination. |
|
|
Term
|
Definition
(Observation)
The act of observation should be associated with the type of evidence defined as observation |
|
|
Term
|
Definition
(Inquiries of Client)
-The act of inquiry of management about issues related to the audit |
|
|
Term
|
Definition
(Documentation)
The use of documents to verify recorded transactions or amounts. |
|
|
Term
|
Definition
Any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria.
-Varies in Persuasiveness |
|
|
Term
| What are the four audit evidence decisions that are needed to create an audit program? |
|
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 |
|
|
Term
|
Definition
| Determined by the quantity of evidence |
|
|
Term
| What are the components of Persuasive Evidence? |
|
Definition
| Sufficiency and Appropriateness |
|
|
Term
| What are the components of Appropriate evidence? |
|
Definition
| Relevance and Reliability |
|
|
Term
|
Definition
| is the inspection or count by the auditor of a tangible asset |
|
|
Term
|
Definition
| Describes the receipt of a written or oral response from an independent third party verifying the accuracy of information that was requested by the auditor. Most expensive along with Physical Examination. |
|
|
Term
|
Definition
| is the auditors inspection of the client's documents and records to substantiate the information that is or should be included in the financial statements. |
|
|
Term
|
Definition
| When auditors use documentation to support recorded transactions or amounts. |
|
|
Term
|
Definition
| Use comparisons and relationships to assess whether account balances or other data appear reasonable compared to the auditor's expectations. They are required during the planning AND completion phases on all audits. |
|
|
Term
|
Definition
| is the obtaining of written or oral information from the client in response to questions from the auditor. |
|
|
Term
|
Definition
| involves rechecking a sample of calculations made by the client |
|
|
Term
|
Definition
| is the auditor's independent test of clients accounting procedures or controls that were originally done as part of the entity's accounting and internal control system |
|
|
Term
|
Definition
| is the use of the senses to asses client activities |
|
|
Term
| Internal Control and Evidence |
|
Definition
| Internal control has a large effect on the reliability of most evidence. |
|
|
