A3

Question 1

seeking of information that is done by management

Answer 1

inquiry

Question 2

assesses risk of material misstatement, and determines nature, extent, and timing of audit procedures

Answer 2

analytical procedures

Question 3

occurs when margins revenue is equal to marginal cost

Answer 3

profit maximization

Question 4

growth, rising economic activity, profits, lower unemployment

Answer 4

expansionary phase

Question 5

falling economic activity

Answer 5

contractionary phase

Question 6

predict economic activity

Answer 6

leading indicator

Question 7

tatistical indicators that usually change simultaneously with general economic conditions

Answer 7

coincidentent indicator

Question 8

tend to follow economic activity

Answer 8

lagging indicators

Question 9

quantity to which audit is performed

Answer 9

extent

Question 10

method to prevent misstatement

Answer 10

substantive approach

Question 11

uses control and details

Answer 11

combined approach

Question 12

test of controls is used when

Answer 12

-auditor’s risk assessment i s based on assumption they are effective

-substantive procedures are insufficient

Question 13

used to gather evidence to support account balances in FS

Answer 13

test of details

Question 14

study of plausible relationships in financial and non financial data

Answer 14

substantive analytical procedures

Question 15

date that increases risk auditor won’t detect material misstatements

Answer 15

interim date

Question 16

identified high risk of fraud risk of material misstatement

Answer 16

period end

Question 17

based on auditor’s judgment

Answer 17

sufficiency

Question 18

obtain representation from external third parties

Answer 18

confirmation

Question 19

examines support for what’s been recorded

Answer 19

vouching

Question 20

review of year-end transactions, especially inventory, cash, purchases, sales, and accruals

Answer 20

cutoff

Question 21

provides assurance event is being given proper recognition in books+ records

Answer 21

tracing

Question 22

procedures performed after balance sheet date to date of auditor’s report

Answer 22

subsequent events review

Question 23

what are the substantive procedures?

Answer 23

tests of details and substantive analytical procedures

Question 24

evidence obtained through 3rd party

Answer 24

external confirmation

Question 25

used to measure numerical measurement of population

Answer 25

variables sampling

Question 26

maximum monetary misstatement auditor will accept

Answer 26

tolerable misstatement

Question 27

population has highly variable recorded amounts

Answer 27

stratification

Question 28

three types of classical variables sampling

Answer 28

mean per unit, ratio estimation, difference estimation

Question 29

Advantags of PPS sampling

Answer 29

stratisfies sample, requires smaller sample

Question 30

formula for sampling interval

Answer 30

tolerable misstatement/ reliability factor

Question 31

sample size formula

Answer 31

recorded amount of population/ sampling interval

Question 32

hierarchy of audit evidence

Answer 32

1. Auditor's direct personal knowledge 2. External evidence 3. Internal evidence 4. Oral evidence

Question 33

PCOAB audit evidence depends on

Answer 33

Design of audit procedure Timing of audit procedure

Question 34

provides additional support, gives validity to recorded data

Answer 34

corroborating evidence

Question 35

obtained from independent sources outside+ provides greater reliability

Answer 35

external evidence

Question 36

creates charts, graphs, diagrams, and dashboards to help emphasize trends and relationships

Answer 36

data visualization

Question 37

explain what happened, what is happening

Answer 37

descriptive analytics

Question 38

understand underlying cause of result of why something happened

Answer 38

diagnostic analytics

Question 39

uses historical data/ facts to make predictions

Answer 39

predictive analytics

Question 40

most advanced and complex analytic

Answer 40

prescriptive analytics

Question 41

what to evaluate in ADA

Answer 41

quantitative data, qualitative data, date and time data, geographic

Question 42

allows auditor to evaluate relationships between variables

Answer 42

regression analysis

Question 43

compare company's forecasted or budgeted values against actual values

Answer 43

variable analysis

Question 44

used to develop expectation of future results

Answer 44

trend analysis

Question 45

attributes that contain primary key from another table

Answer 45

foreign key

Question 46

required attribute in every table that contains unique identifier

Answer 46

primary key

Question 47

designed to provide reasonable assurance of valid transactions

Answer 47

preventative controls

Question 48

errors or irregularities are discovered and corrected on timely basis

Answer 48

detective controls

Question 49

large, unusual, or nonrecurring transactions

Answer 49

Manual Controls

Question 50

high volume and recurring transactions

Answer 50

Automated Controls

Question 51

Support effective functioning and authorization of internal controls

Answer 51

General Controls

Question 52

Help ensure transactions occurred and are authorized

Answer 52

Information processing controls

Question 53

Implementation procedures

Answer 53

1. Inquiry of entity personnel 2. Observation 3. Inspection 4. Reperforming

Question 54

Types of Documentation (FIND)

Answer 54

Flowchart, Internal Control Questionnaire, Narrative, Documentation