Chapter 16 Flashcards
(11 cards)
evaluations of financial info made through analysis of plausible relationships among both financial and non-financial data
analytical procedures
expressed or implied representations by management that are reflected in the financial statement components, and organized into 3 categories relating to transactions, balances, and disclosures
assertions
short term, highly liquid investments that are readily convertible to cash or so near their maturity that there is little risk of change in their value
cash equivalents
the process of obtaining and evaluating direct communication from a third party in response to a request for information about a particular item affecting financial statement assertions
confirmation
the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date
fair value
a bank account containing a stiulated amount of money used for limited purposes
imprest account
a technique used to reconcile the cash receipts and disbursements recorded on the clients books with the cash deposited into and disbursed from the clients bank account for a specific time period
proof of cash
the auditors decision to rely on the entity’s 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 and correcting material misstatements at the relevant assertion level
tests of controls
substantive tests that concentrate on the details of items contained in the account balance and disclosure
tests of details of account balance and disclosures
