Shared Flashcard Set

Details

Audit
Audit
85
Accounting
Undergraduate 4
08/10/2011

Additional Accounting Flashcards

 


 

Cards

Term

 

Reliab level High

 

Definition

inspection of tangible assets, reperformance, and recalculation

Term

 

Reliab level Medium

 

Definition

 

inspection of records and docs, scanning, confirmation, and analytical procedures

 

Term

 

Reliab level

  

Low

Definition

observation and inquiry

Term
vouching
Definition

existence and occurance

Term

Tracing

Definition

completeness

Term

Assertions for trans under audit

Definition

AACCCO


authorization, accuracy, completeness, cutoff, classification, occurrence

Term

Account balances at period end Assertions

Definition

rights and obligations, existence, completeness, valuation and allocation RECV

Term

Assertions for presentation

Definition

completeness, classification, accuracy, occurrence, CCAO

Term

Audit prodcedures used to(3 thing)

Definition

obtain understanding of entity, test operating effectivenss of controls, detect material misstatements

Term

Audit evidence is considered competent when it provides information

Definition

that is relevant and reliable

Term

Factors auditor consider for reliability(3 things)

Definition

independence of source, effectiveness of internal control, auditor’s personal knowledge

Term

Sufficiency is the measure of

Definition

the quanity of audit evidence

Term

Audit documentation is the auditor’s

Definition

principal record of the work performed and the basis for the conclusions in the auditor’s report

Term

PCAOB Auditing Standard 3

Definition

must keep records for 7 years with all evidence and opinion, for public companies only, auditor owns work papers

Term

Audit documentation formatted 3 characteristics

Definition

1. Proper heading 2. Organized so that audit team can find docs  3. Tick marks used on document

Term

Internal controls falls under

Definition

second standard of field work

Term

 

Internal controls provide reasonable assurance about

 

Definition

 

-          Reliability of fina reporting

 

-          Operational effectiveness and efficiency

 

-          Compliance with laws and regs

 

-          Safeguard assets and data

 

Term

Public companies integrated audit

Definition

IC and financial reporting

Term

Ceo and cfo have

Definition

final say on controls

Term

 

Deficiency types

 

Definition

 

-    Material weakness – worst (have to inform audit committee and auditor

 

-          Significant deficiency

 

-          Control deficiency

 

Term

Auditor must report fraud to audit committee when

Definition

someone in power commits fraud (management)

Term

Controls testing effects

Definition

substance testing

Term

SOX requires an

Definition

accepted framework of controls

Term

Most companies use

Definition

COSO framework

Term

 

Types of assertions

 

Definition

 

 

Occurrence

 

Completeness

 

Accuracy

 

Authorization

 

Cutoff

 

Classification

 

 

Term

Occurrence

Definition

– seg of duties, prenumbered docs, daily or monthy rec

Term

Completeness

Definition

same as occurrence

Term

Accuracy

Definition

internal verification of amounts and calculations, month bank rec

Term

Authorization

Definition

general and specific authorization of transactions

Term

Cutoff

Definition

procedures for prompt recording of trans, internal review and verification

Term

Classification

Definition

chart of accouts, internal review

Term
Internal control weaknesses (6)
Definition

 

-          Not 100% effective

 

-          Size of staff effects seg of duties

 

-          People don’t follow controls

 

-          Management override a big red flag

 

-          Collusion

 

-          Mistakes

 

Term
4 procedures to test IC
Definition

 

-          Inquiries

 

-          Inspection

 

-          Observation

 

-          Reperformance

 

Term

Substantive strategy does not rely of IC because

Definition

CR is assessed at max

Term