Deck 25 Flashcards Preview

Audit > Deck 25 > Flashcards

Flashcards in Deck 25 Deck (20):
1

When is it required to apply SSARS?

When an auditor prepares, reviews, or compiles financial statements

2

Assertion and procedures relating to overstatement of inventory

Existence/occurrence: inspection, vouching, observe inventory count

3

Assertions and procedures related to AFDA and AR

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

4

Procedures for rights and obligations

Review of subsequent events, inspection and examination, confirmation

5

Assertion and procedures for a lawsuit (contingent liabilities)

Understandability/classification: inquiry

6

Procedures to test for proper cutoff

Cutoff procedures, inspection and examination

7

Assertions and procedures dealing with the understatement of liabilities

Completeness: tracing, review of subsequent events

8

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

9

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

10

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

Vouch fixed asset acquisitions to purchase invoices

11

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

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

12

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

Examine invoices from suppliers

13

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

analytical procedures

14

An engagement to report on compliance is considered a ______ engagement

Attestation

15

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

16

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

Completeness of recorded investment income

17

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

18

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

Investment advisor to the employee benefit plan

19

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

Minutes of the board of directors

20

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