READ IT 1 Flashcards
Top down approach to select controls to test in an integrated audit
- Evaluation of overall risks at the financial statement level.
- Consideration of controls at the entity level
- Evaluation of accounts, disclosures, and assertions for which there is a reasonable possibility of material misstatement.
Auditor trace on a client’s bank cut off statement:
A.Checks dated after year end listed in the cutoff statement to the year end outstanding checklist
B. Prior year checks listed in the cutoff statement to the year end outstanding checklist.
C. Deposits recorded in the cash receipts journal after year end to the cutoff statement.
B. Prior year checks listed in the cutoff statement to the year end outstanding checklist.
Which of following factors is most relevant when an auditor considers the client’s organizational structure in the context of control risk?
A. Physical proximity of the accounting function to upper management.
B. Management’s attitude toward info processing and accounting departments.
C. The suitability of the client’s lines of reporting.
C. The suitability of the client’s lines of reporting.
Su phu hop cua cac dong bao cao. Neu bao cao len cai cho ko phu hop, thi xay ra control risk.
In testing plant and equipment balances, an auditor may inspect new additions listed on the analysis of plant and equipment. This procedure is designed to obtain evidence concerning management’s assertions of :
Existence: Y or N
Understandability of presentation and classification: Y or N
Existence: YES
Understandability of presentation and classification: NO
B/c inspection la di xuong kiem tra coi bang mat, thi biet dc existence co hay ko. KO BIK DC chi phi tra cho plant and equipment dc ghi hop li, chi tiet, tiet lo day du hay ko.
GAGAS-Generally accepted goverment auditing standards specifically include all of the following ethics principles except:
Fraud detection
Luat dao duc cua GAGAS bao gom:
-proper use of goverment info
-Serving the public interest
-Integrity
ko bao gom bat gian doi
The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the:
Authorization of transactions from the custody of related assets.
hiring personnel( H/R, personnel dep: hiring, payrate, etc are authorized by the personnel department) No co quyen cho, duoi, luong bong.
Adminstrative controls- Quan li dieu kien- management’s directives.
Responsibility of an auditor to a subsequent event occurred after the date of auditor’s report on an integrated audit?
ko co trach nhiem j het ngoai tru khi auditor biet dc condition that existed at the report date, appropriate action phai dc thuc hien
what is the understandability & classification assertion?
The claim relates to all financial ino and disclosures being CLEAR and easily UNDERSTAND to financial statement users.
The audit team should inspect and review the F.S to assess whether there are any issue.
Concern here is the F.S are UNCLEAR or MISLEADING.
if an auditor peforms an inspection of documentation supporting a client’s account balances, he or she most likely be testing any of the following F.S assertions, except:
A. Understandability of presentation and clarification
B. Right and obligtion
C. Valuation, allocation, accuracy
D. Completeness
D. Completeness
B.C completeness : auditor may observe process, procudures, trace transactions from source to accting record, perform analytical review procedures.
which circumstances would the use of the negative form of accounts receivable confirmation most likely be justified?
JUST: CONG LY
BE JUSTIFIED: DC BIEN MINH LA DUNG
Truong hop nao dc xai negative A/R confirmation?
A small number of accounts may be in dispute and the A.R balance arises from sales to many customers with small balances.
The auditor should determine whether providing a non audit service would create a threatto independence, either by itself or in aggregate with other nonaudit services provided, with respect to any audit it performs in accordance with Generally Accepted Goverment Auditing standards. A critical component of this determination is:
Consideration of management’s ability to effectively oversee the non-audit service to be performed.
Quan trong nhat la coi kha nang cua bo quan li coi ho co coi ngo dc hieu qua cai dich vu non-audit hay ko. Chuyen nay anh huong den tinh doc lap.
The auditor should determine whether providing a non audit service would create a threatto independence, either by itself or in aggregate with other nonaudit services provided, with respect to any audit it performs in accordance with Generally Accepted Goverment Auditing standards. A critical component of this determination is:
Consideration of management’s ability to effectively oversee the non-audit service to be performed.
Quan trong nhat la coi kha nang cua bo quan li coi ho co coi ngo dc hieu qua cai dich vu ko aud
When planning an audit of the effectiveness of the entity’s internal control in an intergrated audit of a non issuer, an auditor would be least likely to consider which of the following factors?
A. The evaluation of the operating effectiveness of the controls.
B. The extent of recent changes in the entity and its operations.
C. Preliminary judgments about the effectiveness of internal control.
D. The type of available evidential matter pertaining to the effectiveness of the entity’s internal control.
A. The evaluation of the operating effectiveness of the controls.
When PLANNING an audit, this would be the least to consider. The evaluation of the operating effectiveness of controls occurs after the planning stage.
The objective of tests of details of transactions performed as tests of controls is to:
A. Evaluate whether internal controls operated effectively
B. Detect material misstatements in the account balances of the F.S
C. Determine whether internal controls have been implemented.
D. Monitor the design and use of entity documents such as prenumbered shipping forms.
A. Evaluate whether internal controls operated effectively
Muc dich cua tests of details ma thuc hien nhu TEST OF CONTROLS thi de DANH GIA cai internal control HOAT DONG CO HIEU QUA HAY KO.
B. Detect material misstatements in the account balances of the F.S -WRONG ANSWER
Vi day la cau tra loi cho The objective of tests of details of transactions performed as SUBSTANTIVE TESTS.
The objective of a review of interim financial info of a public entity is to provide an accountant with a basis for reporting whether:
A. Material modifications should be made to conform with generally accepted accounting principals.
B. The F.S are presented fairly in accordance with GAAP.
MUC DICH cua REVIEW la cung cap cho ke toan cai nen tang de bao cao can phai thay doi gi lon de tuan theo luat GAAP.
Accounts receivable represent all amounts owed to the entity at the B.S date
Procedure: perform sales cut-off tests to obtain assurance that sales transactions and corresponding entries for inventories and Cost of goods sold are recorded in the same and proper period.
Day la completeness assertion, cty so huu toan bo so A.R vao ngay B.S. Thi thuc hien cut off test de bao dam toan bo A.R la dc ghi xuong trong dung khung thoi gian cua no.
A.R are stated at net realizable value
review the aged trial balance for significant past due accounts.
de bat dc co cai A.R-no xau nao can write off.
cuoc kien tung ma “ reasonably possible” bi mat $ thi chi can disclose-tiet lo la dc. Ko can accrual expense
chung nao co xac suat cao xay ra PROBABILITY $ bao nhiu tien cu the thi moi ghi vao
CAI NAO KO CO TRONG CUOC TRO CHUYEN VE planned scope and timing of a F.S audit for an issuer?
the auditor SHOULD NOT COMMUNICATE with those charged with governance about: PROBABLE HIGH RISK AUDIT PROCEDURES. dung ngu ma di noi vs khach nhung thu tuc kiem toan co rui ro cao
Co the noi:
-how significants risks of material misstatement will be addressed.
-the planned approach toward internal control
-factors affecting materiality
-potential use of internal audit
In an audit report refers to a scope limitation that is material but not pervasive contains the words, “In our opinion, except for the below-mentioned limitation on the scope of our audit…” This is considered a(an):
Example of inappropriate wording
Dung tu ngu sai, vi neu la qualified audit opinion report thi phai ghi la “ In our opinion, except for the POSSIBLE EFFEECTS of the matter described in the Basis of Qualified Opinion section…”
-HAU QUA CO THE CUA VAN DE DC TRINH BAY TRONG DOAN PHIA DUOI, chu ko phai don thuan la chi vi han che bi chan lai trong audit cai gi do.
which of the following is not a risk assessment procedure recommended by PCAOB standards when performing an issuer audit?
A. Inquiring of client management & the audit committee about the risks of material misstatements.
B. Perform analytical procedure related to the revenue
C. Performing preliminary test of controls over selected transaction cycles.
C. Performing preliminary test of controls over selected transaction cycles.
PHAI DANH GIA RUI RO ROI MOI KIEM TRA-neu ok thi kiem tra control, neu ko thi chi kiem tra chi tiet-substantive test only.
CPA engage to examine an entity’s financial forecast. The CPA believes that several significant assumptions do not provide a reasonable basis for the forecast. Under these circumstances, the CPA should issue:
A. Qualified opinion
B. Pro forma opinion
C. Unmodified opinion with Explanatory paragraph
D. Adverse opinion
D. Adverse opinion
vi chi can 1 gia dinh quan trong ma ko cung cap dc nen tang hop li cho ban bao cao tai chinh thi coi nhu sai bet-adverse opinion
qualified la khi no ko tuan theo guidline loi khuyen cua AICPA.
In ASSESSING CONTROL RISK, an auditor ordinarily selects from a variety of techniques, including:
A. Inspection and verification
B. Inquiry and analytical procedure
C. Comparison and confirmation
D. Preperformance and observation
D. Preperformance and observation
MUON DANH GIA RUI RO CONTROL THI PHAI CHUI VAO KIEM TRA CONTROL. chu ko the chi lam phan tich (analytical procedures: fits for planning phase)
Nhao vao lam test of control de danh gia rui ro control:
-hoi chuyen(inquire)
-kiem tra( inspection of documents and reports indicate performance of the policy or procedures)
-quan sat-observation
-thuc hien lai -reperformance
tolerable rate of deviations la luon luon quyet dinh cho sample size, chu ko co chieu nguoc lai.
WRONG: increasing the number of items selected for the test of controls usually increases the tolerable rate of deviations.
