Deck 25 Flashcards Preview

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Flashcards in Deck 25 Deck (20):

When is it required to apply SSARS?

When an auditor prepares, reviews, or compiles financial statements


Assertion and procedures relating to overstatement of inventory

Existence/occurrence: inspection, vouching, observe inventory count


Assertions and procedures related to AFDA and AR

Valuation, allocation, and accuracy: recalculations/estimates, review of subsequent events


Procedures for rights and obligations

Review of subsequent events, inspection and examination, confirmation


Assertion and procedures for a lawsuit (contingent liabilities)

Understandability/classification: inquiry


Procedures to test for proper cutoff

Cutoff procedures, inspection and examination


Assertions and procedures dealing with the understatement of liabilities

Completeness: tracing, review of subsequent events


When an auditor discovers the omission of an audit procedure related to a previously issued report, the auditor should first:

Assess the importance of the omitted procedures


When an accountant examines a financial forecast that fails to disclose significant assumptions used to prepare the forecast, the accountant should issue what kind of opinion?

Adverse opinion


What procedure provides evidence for the rights and obligations assertion related to fixed assets?

Vouch fixed asset acquisitions to purchase invoices


What procedure provides evidence for the completeness assertion related to accounts payable?

Examine invoices paid subsequent to year end and trace to subsidiary ledger


What procedure provides evidence for the valuation and allocation assertion related to inventory?

Examine invoices from suppliers


The auditor scanned the repairs and maintenance account for unusually large amounts. What audit procedure is necessary?

analytical procedures


An engagement to report on compliance is considered a ______ engagement



When audited financial statements are presented in comparative form with unaudited financial statements from a prior year, the auditor should either:

Reissuer his or her report or include a separate paragraph in the current year report


In testing long-term investments, an auditor ordinarily would use analytical procedures to ascertain the reasonableness of the:

Completeness of recorded investment income


To satisfy the valuation assertion when auditing an investment accounted for by the equity method, an auditor most likely would:

Examine the audited financial statements of the investee company


Under DOL rules, independence is impaired when an auditor also serves as an:

Investment advisor to the employee benefit plan


An auditor should trace corporate stock issuances and treasury stock transactions to the:

Minutes of the board of directors


In auditing a not-for-profit entity, the auditor has a responsibility to:

Assess whether management has identified laws and regulations that have a direct and material effect on the financials