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Acronyms Flashcards

(109 cards)

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1
Q

Why obtain customer balance? (receivables)

A

To agree to trade receivables balance in TB

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2
Q

Why get after-date cash receipts? (Receivables)

A

To follow through to year-end receivables balance

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3
Q

Why get a sample of GDN (Receivables)

A

Ensure recorded in correct accounting period

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4
Q

Why review post-year-end bank ledger and bank statements?

A

To identify whether payment has been made

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5
Q

Why obtain copy of a legal claim?

A

To understand basis for and the amount claimed

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6
Q

Why obtain a bank confirmation letter (bank loan)

A

Confirm the outstanding balance and agree to loan balance within FSs

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7
Q

Why obtain copy of loan documentation (bank loan)

A

Confirm amount borrowed and repayment terms

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8
Q

Why review loan agreement for details of covenant (bank loan)

A

Recalculate to identify if any breaches have occurred

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9
Q

Why obtain receipt of a loan?

A

Agree amounts to loan documentation and bank statements

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10
Q

Why recalculate a finance cost (loan)

A

To interest rate and amounts outstanding

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11
Q

Why obtain a useful life policy for PPE additions?

A

To confirm if amount of time is needed

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12
Q

How to confirm if training costs are expensed (NCA additions)

A

Confirm using a journal entry

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13
Q

Why recalculate depreciation charge? (NCA additions)

A

Confirm that calculations have been appropriately time-apportioned

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14
Q

Why obtain detailed breakdown of costs (NCA)

A

Confirm it is included in NCA register to ensure completeness

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15
Q

When question says bank balances?

A

Think bank reconciliation and it’s accessories

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16
Q

Why examine old unpresented cheques (bank balances)

A

To ensure they are written back

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17
Q

Where to agree bank ledger to (bank balances)

A

Year-end bank statement and bank confirmation letter

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18
Q

Why inspect correspondence from customer (legal claim)

A

Assess likelihood that customer will pay

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19
Q

Why reperform supplier statement reconciliations (payables)

A

Agree individual supplier balances and investigate any reconciling items

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20
Q

Why review journals entries processed for trade payables?

A

Correct misstatement of trade payables due to payment run

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21
Q

Which assertion does a payables circularisation relate to?

A

Completeness (useful to follow up on non-responses)

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22
Q

Which evidence should be provided for getting evidence of payment f or a legal claim?

A

Post-year-end bank statement

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23
Q

What sort of procedure is a proof-in-total calculation?

A

An analytical procedure

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24
Q

Why obtain credit notes (revenue)

A

To remove from revenue

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25
Why cast a breakdown of revenue?
To agree to TB and FSs
26
Why select a sample of sales invoices? (Revenue)
To agree back to customer master data
27
Can GDNs confirm completeness of revenue?
Yes, by comparing to detailed sales listing in the FSs
28
Why recalculate invoice totals (revenue)
So it includes anu discounts and sales tax
29
Why obtain a proposed inventory count instructions? (inventory count)
Review any control deficiencies and discuss them with management prior to counts
30
What is important when deciding which warehouse to attend for an inventory count?
Determine which warehouse has the most materiality
31
Why obtain a copy of sequentially numbered inventory sheets?
To follow up testing at a final audit
32
Why select a sample of inventory sheets?
To perform tests counts from inventory sheets to physical inventory
33
Why observe an inventory count?
To ensure third-party inventory is removed and ensure inventory is in good working order
34
Rights and obligations procedure for NCA?
Confirm purchase price to supplier invoices
35
Why inspect bank ledger and bank statement (share issue)
Evidence of cash received from a share issue
36
If sum received less than when shares were issued?
Confirm difference is treated as share capital called up but not paid in FSs
37
Why agree all assets to non-current asset register?
To confirm existence
38
Why recalculate revaluation adjustment?
Agree correctly recorded in the revaluation surplus
39
When non-response with client's permission? (confirmation)
Team should arrange to send a follow-up confirmation request
40
How to confirm amount from a balance owing for receivables?
Using after-date cash receipts and GDNs
41
How to test difference in cash in transit?
Agree to post-year-end cash receipts
42
Why obtain written representation from management (legal claim)
To confirm the likelihood of a lawsuit
43
When assessing the adequacy of a disclosure. What should it relate to?
An accounting standard
44
What can post-year-end cash receipts be used for in receivables?
What debt was recovered by the audit completion date
45
When should standard cost cards be agreed to?
Raw materials Labour costs Overheads allocated
46
When to get an inventory listing?
Agree to inventory records
47
Purchases invoices are compared to what in inventory?
Raw materials
48
Time sheets are compared to what in inventory?
Wage records
49
Why review post-year-end sales invoices (inventory)
To assess if NRV is above cost. Determine if adjustment is required
50
Why obtain and cast an inventory listing?
To agree total to inventoruy records
51
Agree quantity of products shown at year end to what? (inventory)
Inventory count records
52
What are cost cards for in inventory?
Finished goods
53
Why review post-year-end payments for damage settlements?
To assess reasonableness of the provision
54
When should an allowance be provided for receivables?
If it unlikely they will be recovered
55
Why obtain a schedule of income?
To trace to TB
56
What should be done to sample donations? (income)
Trace to bank statements and income ensuring they are recorded completely and accurately
57
Substantive procedure for deferred income?
Make sure it is excluded from current income and instead recognised as deferred income
58
Why obtain a breakdown of a restructuring provision?
Confirm only direct expenditure relating to restructuring is included
59
Should written representation be obtained for a restructuring provision?
Yes, as it is subjective
60
Should retraining costs be included in a restructuring provision?
No
61
Why review post-year-end payments (provisions)
To assess whether provision is reasonable
62
When a bank loan is repaid early?
There are early settlement charges
63
Where to agree loan proceeds?
To bank ledger account and bank statements
64
How to agree oprning and closing balances of loans?
Cast schedule to confirm accuracu and agree TB and draft FSs
65
What can a registration number of a vehcile be used for?
Agree to non-current asset register
66
Where to agree cash payment (vehicle additions)
To bank ledger account and bank statement
67
Why discuss with management a vehicle's useful life
To determine if vehicles are being used for their entire period
68
If difference due to cash in transit, where should it be agreed to?
Post-year-end cash receipts
69
If difference due to goods in transit, where should it be agreed to?
Pre-year-end GDN
70
Why review customer correspondence for receivables?
Assess likelihood of payment
71
Why obtain cash forecast (going concern)
If company has sufficient cash flow
72
Directors and going concern?
Important to get their opinion through written representation
73
What documents are needed to trace inventory items (goods and WIP)?
Obtain relevant cost sheets to agree to PI, time sheets, etc
74
Why are post-year-end sales invoices useful?
To determine if NRV is above cost
75
Why obtain post-year-end credit notes for WIP inventory?
Could signify write down is required
76
Why obtain a schedule of intainglbe assets?
To cast and agree to general ledger, TB and FSs
77
Market research reports for intangible assets?
Probable future economic benefits arise
78
How to agree expensed as research and capitalised as development?
To invoices
79
Why review feasibility reports for intangible assets>
Confirm technical feasibility and intention to complete the project
80
What is a sales tax liability?
A current liability
81
How to calculate sales tax liability?
Sales tax charged - sales tax incurred
82
How to review any additional outstanding payments due to a tax authority?
Any current and post-year-end correspondence
83
Where to compare a sales tax liability?
To prior year balance and investigate any differences
84
Which document is individual bonus payments agreed to?
Payroll records
85
How to confirm amount of bonus paid?
To bank ledger and bank statements
86
Why perform proof-in-total for depreciation charge?
Discuss with management if significant fluctuations arise
87
Which standard is depreciation included in?
IAS 16
88
How to check if new rates of depreciation have been applied?
Through non-current asset register
89
Why obtain a breakdown of asset categories for depreciation?
For comparison and discussion with management
90
Why review asset expenditure budgets for dpereciation?
So revised asset lives correspond with the planned period
91
Receivables and rights and obligations assertion?
Review bank confirmations and loan agreements for evidence that receivables have been assigned as security for company
92
What to discuss with directors in a redundnacy provision?
Confirm their intention and whether a present obligation exists at year end
93
Why recalculate a redundancy provision?
To ensure components of calculation to supporting documentation such as employee contracts
94
Is consent required for a receivables circulisation?
Yes, usually from FD
95
Why review after-date invoices and credit notes for trade payables and accruals?
To ensure no further items need to be accrued
96
Post-year-payments and trade payables accruals used for>
Ensuring recording in correct period
97
Where to confirm amount from legal claim?
Post-year-end bank ledger and bank statement. Confirm if the provision is reasonable through actual payment
98
How should receipt of bank loan be confirmed?
Bank ledger account and bank statement
99
What should be referenced when recalculating finance cost?
Reference to amounts outstanding during year
100
How to confirm rights and obligations?
Agree to supplier invoices
101
Why recalculate depreciation?
For time apportion
102
Where should bank confirmation letter amount be agreed to?
Bank reconciliation and bank ledger account
103
Where should outstanding lodgments be agreed to?
Pre-year-end bank ledger and post-year-end bank statements
104
Which document provides evidence for a share issue?
Bank statement and ledger for evidence of cash received
105
Why recalculate share issue?
Ensure correctly recorded in share capital and share premium
106
Post-year-payments at restructuring provisions?
Used to assess reasonableness
107
What are asset expenditure budgets useful for in depreciation?
To assess whether there are any plans to replace equipment
108
How to confirm reasonableness of a depreciation rate?
Through industry average
109
Where should all bank accounts be included on?
The TB

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