Term
| Fraud triangle risk factors SAS99 |
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Definition
1. Incentive/Pressure - mgmt or other employees have incentive to commit fraud
2. Opportunities - circumstances provide opportunity to commit fraud
3. attitudes/ rationalization - attitude, character, ethical values exist that allows commiting dishonest act or so much pressure that can rationalize commiting dishonest act |
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Term
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Definition
| listing od all procedures auditor will do to gather sufficient, appropriate evidence (GAAS requires written program) |
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Term
| tests of controls and ______ may be done at same time for efficiency's sake |
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Definition
| substantive tests of transactions |
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Term
| test of controls provide auditor with reasonable assurance that _____ |
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Definition
| accounting procedures are functioning as intended |
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Term
| analytical procedures are required in ___ and ___ of audit |
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Definition
| phase 1 (planning) phase 4 (completion) |
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Term
| _____ are considered least costly method of auditing procedures while ____ is most costly |
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Definition
| analytical procedures; test of details balances |
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Term
| to obtain understanding of internal control auditor will |
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Definition
| examine, inquire, examine documents |
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Term
| auditors test controls to determine ______- of control |
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Definition
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Term
| detailed test of balances are gen performed on _____ |
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Definition
| balance sheet accts (usu less bal sheet accts but relate to all auditing cycles) |
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Term
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Definition
| require public cos to test interanl controls annually |
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Term
| Auditor's ______ _____ determine the audit procedures required to express and opinion on financial statements taken as whole |
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Definition
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Term
| Acquisition and Payment cycle refers to all transacs relating to (3) |
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Definition
| Purchase of goods and services, cash disbursements, and purchase returns and allowances |
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Term
| audit objective in this cycle is |
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Definition
| to determine that accounts payable are fairly stated and properly disclosed |
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Term
| audit if this cycle takes longer due to |
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Definition
| the numerous accounts affected |
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Term
| Acq and Payment cycle starts with_____. once goods received, _____ recognized |
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Definition
| request for purchase of goods or service (once good receives, liability recognized) |
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Term
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Definition
| document that shows reduction in amount owed to vendor, normally relating to a return of goods |
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Term
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Definition
| obligations company has for all good and service purchased. normally dont involve payment of interest or receipt of cash |
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Term
| Analytical procedures are used to value company _____ as ____ should be comparetively stable from yr to yr |
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Definition
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Term
| analytical procedures compare to prior yrs to see if any _______ _____ |
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Definition
| unusual fluctuations have occured |
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Term
| Strong internal control includes: |
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Definition
1. Separation of duties - authorization and purchasing within same dept
2. Treasurer or comptroller should sign company checks and supervise mailing
3. procedures to avoid double payments to vendors (i.e receiving report attached to payment/disbursement report) |
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Term
| out-of-period liability test |
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Definition
| aka search for unrecorded accounts payable - looking for understatement of liabilities |
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Term
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Definition
| preped by mgmt, should include info relating to mgmt awareness of undisclosed contingent L's |
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Term
| SAS 59 - auditor must evaluate the ability for comp to remain in business for _____ beyond ____ |
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Definition
| one year; balance sheet date |
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Term
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Definition
| auditors are req to review transacs occuring after year-end to determ if fin states would be affected (ie large customer filing bankruptcy) |
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Term
| dual dating of audit report may occur when |
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Definition
| an event takes place after field work was completed but before report has been issued.review of an important event |
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Term
| Contingent liability treatment (3) |
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Definition
Remote (slight chance) - no disclosure
Reasonably possibl - Footnote necessary
Possible (likely to occur) - ADJ fin statements OR note disclosure |
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Term
| In final stages of audit, auditor will send ______ of _____ to (3) |
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Definition
letter of inquiry
1. every attorney/law firm client has had dealings with during per under audit
2. prior year
3. occasionally |
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Term
| letter of inquiry includes |
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Definition
1. List including
- pending threatened litigation
- asserted or unasserted claims or assessments with which attorney has had involvement
2. request that attorney furnish info or comment about progress of each item listed |
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Term
| When perfoming audit to detrm contingent liabs, auditor should inquire of _____ and ___ |
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Definition
| upper level mgmt and company attorneys |
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