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Acct 407 - Exam 1
Chapter 8
13
Accounting
Undergraduate 4
04/04/2010

Additional Accounting Flashcards

 


 

Cards

Term
2 most common methods of committing finc fraud
Definition
1. overstate rev 2. understate exp and liab
Term
4 key docs of the acquisition cycle
Definition
1. purch req 2. po 3. rec report 4. vendor invoice
Term
2 inherent risks of acquisition
Definition
1. non-cancelable purchase agreements (cust may forget) 2. capitalizing expenses 3. unrecorded liability (biggest risk)
Term
segregation of duties for the acquisition cycle
Definition
1. authorization of order 2. custody of goods 3. recording of invoice
Term
facets of completeness assertion as it relates to acquisition cycle
Definition
(search for unrecorded liabs at yearend). 1. check for missing POs or reqs 2. 3rd party invoices 3. cash disbursements journal*** 4. open POs, have goods been received? 5. unmatched invoices 6. confirmations w/ existing payables & previous vendors 7. ask client what their process is to make sure books show complete liabs
Term
primary audit objective of AP, other evidence available, confirmation required by GAAS?
Definition
1. completion 2. vendor invoices (external) 3. no, because of 3rd party evidence
Term
primary audit objective of AR, other evidence available, confirmation required by GAAS?
Definition
1. existence/occurrence 2. invoices (internal) 3. yes, because no 3rd party evidence
Term
difference between accrued liabilities and accounts payable
Definition
accrued liabilities occur due to passage of time, thus no invoice has been received. accounts payable arises because invoice has been received
Term
ST As and Ls have _ turnover and are audited at what time?
Definition
high; audit year end balances
Term
LT As and Ls have _ turnover and are audited at what time?
Definition
low, audit changes (depreciation, purchases, sale of)
Term
3 inherent risks about PP&E, 2 risks we're not concerned about
Definition
1. disposals that haven't been reflected 2. acquisitions 3. impairments // NOT: 1. cutoff 2. misappropriation
Term
7 ICs over PP&E
Definition
1. use of cap budget 2. maintenance of subsidiary ledger 3. authorization system in place 4. analysis of variances from budgeted expenditures 5. policy distinguishes between capital and revenue expenditures 6. system of retirement authorization and documentation 7. periodic inventory to verify location, condition, and existence of all property
Term
7 relevant assertions for PP&E
Definition
1. existence (is it real?) 2. completeness 3. cutoff 4. rights and obligations 5. valuation/allocation (impairment) 6. accuracy 7. presentation and disclosure
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