Deck 3 Flashcards
the audit ____ outlines the nature, extent, and timing of the audit procedures
PLAN; NOT strategy
when audit procedures are performed before year-end, the auditor must assess the INCREMENTAL RISK involved and determine whether sufficient alternative procedures exist to extend the interim conclusions to year-end (T/F)
TRUE
What do these correlate to? (COVERUP)
- Completeness
- CutOFF
- Valuation, allocation, and accuracy
- Existence and occurrence
- Rights and obligations
- Understandability of presentation and classification
F/S ASSERTIONS
in designing a written audit plan, an auditor should establish specific audit objectives that relate primarily to the F/S assertions (T/F)
TRUE
in assessing the _____ of internal auditors, the independent CPA considers info obtained from previous experience, from discussion with mgmt, from external quality reviews if performed, and from professional internal auditing standards (ex: The Institute of Internal Auditors)
OBJECTIVITY
______ is reflected by the internal auditor’s education, professional certification, experience, performance evaluations, audit plan, audit procedures, and the quality of audit documentation
COMPETENCE
______ auditors may assist the auditor in obtaining an understanding of internal control and in performing tests of controls and substantive tests.
INTERNAL
the auditor ordinarily considers materiality for planning purposes in terms of the ______ (smallest or largest) aggregate level of misstatements that could be considered material to any one of the F/S
SMALLEST
if there is a high likelihood of misstatements then the auditor sets materiality at a _____ (higher or lower) amount, which results in the auditor looking closer at audit evidence
LOWER
an increase in materiality levels would result in a _____ (increase or decrease) in audit risk, which would result in less substantive testing
DECREASE
