Chapter 10 Flashcards
(13 cards)
evaluations of financial info through analysis of plausible relationships among both financial and non financial data
analytical procedures
controls that apply to the processing of specific computer applications and are part of the computer programs used in the accounting system
application controls
expressed or implied representations by mgmt that are reflected in the financial statement components
assertions
an external confirmations represents audit evidence obtained by the auditor as a direct written response to the auditor from a 3rd party
confirmation
controls that relate to the overall info processing environment and have pervasive effect on the entity’s computer operations
general controls
process of covering cash shortage by applying cash from 1 customers AR against another customers AR
lapping
a confirmation request to which the recipient responds only if the amount or info stated is incorrect
negative confirmation
a confirmation request to which the recipient responds whether or not he or she agrees with the amount or info stated
positive confirmation
the auditors decision to rely on the entitys controls, test those controls, and reduce the direct tests of the financial statement accounts
reliance strategy
tests to detect errors or fraud in individual transactions
substantive tests of transactions
audit procedures performed to test the operating effectiveness of controls in preventing or detecting material misstatements at the relevant assertion level
tests of controls
tests that concentrate on the details of amounts contained in an account balance and in disclosures
tests of details of account balances and disclosures
a transaction being traced by an auditor from origination through the entity’s info system until it is reflected in the entity’s financial reports
walkthrough
