Flashcards in Audit Evidence Deck (36)
What is all the information the auditor uses to arrive at the conclusions on which the audit is based?
Audit evidence is gathered throughout the audit when performing?
Risk assessment procedures, tests of controls, substantive procedures, and other audit procedures
What are different types of audit evidence?
Accounting records, corroborating evidence, and evidence in electronic form
How does the auditor tests the accounting records?
Through analytical procedures and substantive procedures
What does corroborating evidence include?
Minutes, confirmations, industry analysts' reports, data about competitors, and information obtained through observation, inquiry and inspection
Is cost alone or difficulty in obtaining evidence a valid basis for omitting a procedure for which there is no appropriate alternative?
Appropriate audit evidence must be?
Reliable and relevant
What is the hierarchy of audit evidence?
Auditor's direct personal knowledge, external evidence, internal evidence, and oral evidence
What does substantive procedures consist of?
Test of details and substantive analytical procedures
What are audit procedures used to gather evidence to support the account balances as reflected in the financial statements?
Tests of detail
What procedures include a review of the current and prior year's financial statements and the current year's budget?
How should the auditor design and perform substantive analytical procedures?
Determine the analytical procedures that are suitable for testing the assertion, evaluate the reliability of the data from which the auditor's expectation is to be developed, develop an expectation, perform the analytical procedures and compare the results, and investigate any significant difference
How does an auditor investigate any significant difference?
Inquiring of management and performing other audit procedures as necessary
When an analytical procedure is used as the principal substantive test of a significant financial statement assertion, the auditor is required to document the?
Auditor's expectation, factors, results, additional audit procedures performed, and results of such additional procedures
What type of confirmation is stating that the party agrees or disagrees with the information in the request?
What type of confirmation is when the confirming party respond directly to the auditor only if the confirming party disagrees with the information in the request?
The auditor should maintain control over external confirmation requests, including?
Information to be confirmed, selecting the appropriate confirming party, designing the confirmation, and sending the requests
What does footing, crossfooting, and recalculation?
Verify the mathematical accuracy
What does inquiry consist of?
Requesting information from knowledgeable parties
What is directional testing in which the auditor examines support for what has been recorded in the records and statements?
What generally provides evidence about the existence assertion, rather than about ownership, rights, obligations, or valuation?
What is a specific type of inquiry that involves obtaining representations from independent external third parties about account balances and transactions or events?
What is the relevant assertions mneumonic for account balances?
What is the relevant assertions mneumonic for transactions and events?
Completeness, valuation, allocation, and accuracy, existence and occurrence, and rights and obligations
What is the relevant assertion mneumonic for transactions and events?
What is the relevant assertions for transactions and events?
Completeness, cutoff, valuation, allocation, and accuracy, existence and occurrence, and understandability and classification
What is the relevant assertion mneumonic for presentation and disclosure?
What is the relevant assertions for presentation and disclosure?
Completeness, valuation, allocation, and accuracy, rights and obligations, and occurrence, and understandability and classification
What is mneumonic for standard auditing procedures?
FIVE CARROT CARS