Assurance ACA Flashcards
(34 cards)
What are the four things companies are required to post regarding sustainability?
Governance,
Strategy,
Risk management,
Metrics.
Where is the expectation gap closed?
The letter of engagement.
How is an audit obtained?
Through selection and engagement.
What does TRIMROT stand for and what is it for?
Technical competence
Resources
Independence
Money laundering
References
Outgoing auditors
Terms of engagement.
It helps auditors decide on whether or not to accept an engagement.
What does SARD stand for and what is it used for?
What does RAP stand for, when is it used and what % are associated with each letter?
Revenue, assets and profit.
What are the assertions for account balances?
Existence.
Right and obligations.
Completeness.
Accuracy, valuation and allocation.
Classification.
Presentation.
What are the assertions for transactions?
Occurrence.
Completeness.
Accuracy.
Cut-off.
Classification.
Presentation.
What are the key sources of information to gather audit evidence for liabilities?
payables ledger account and supplier statements.
Confirmation from suppliers.
Payments made post year ended to suppliers.
What do auditors do when evaluating representations?
Seem corroborative audit evidence.
Evaluate reasonableness and consistency with information.
Assess individuals making up the presentation.
What does the auditor need to consider when providing an opinion?
Whether sufficient appropriate evidence has been obtained.
Whether uncorrected misstatements are material.
What are the main ethical threats?
Self-interest.
Self-review.
Advocacy.
Familiarity.
Intimidation.
Management.
How often does an engagement partner need to be rotated and how long should they not return for?
5 years.
How often does an engagement quality reviewer need to be rotated and how long should they not return for?
7 years for rotation and 5 years until return.
When should a key partner be rotated and how long should they not return for following this?
7 years for rotation and 2 years until they can return.
What happens when an engagement quality reviewer becomes the engagement partner?
Their combined service should not exceed seven years.
What are the factors to consider when resolving ethical conflicts?
The relevant facts.
The relevant parties.
The ethical issues involved.
The fundamental principles related to the matter in question.
Established internal procedures.
Alternative courses of actions.
What are the main types of sampling techniques?
Simple random.
Systematic.
Stratified.
Cluster.
Convenience.
Quota.
Purposive.
What are 5 general principles relating to the quality of audit evidence ?
External.
Auditor.
Entities control systems.
Written over oral.
Originals.
What are procedures for gathering evidence?
Inspection of tangible assets.
Inspection of documentation.
Observation.
Inquiry.
External confirmation.
Recalculation.
Re performance.
Analytical procedures.
When do we test for an overstatement?
If the financial item in question is an asset.
When do we test for understatement?
When the financial item is a liability.
What are the three mandatory written representations?
That management has:
- Fulfilled it’s responsibility for the preparation of the financial statements in accordance with the applicable financial reporting network.
- provided the auditor with all the relevant information and access as agreed in terms of the audit engagement.
- recorded and reflected all transactions in financial statements.
What are the major risk of tangible non-current assets being misstated?
- The company not actually owning the assets.
- the assets not actually existing or having been sold by the company.
- omission of assets owned by the company.
- assets being incorrectly presented in the financial statements.
- assets being overvalued, either by inflating cost or valuation, or by undercharging depreciation.
