CPA Audit Review Module 4-4

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Joens1313
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CPA Audit Review Module 4-4
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2015-01-26 23:49:20
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CPA Audit Review Module
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CPA Audit Review Module 4-4
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  1. Accounts Payable confirmations are most frequently used in circumstances involving the following

    1. -------------------------
    2. bad financial position
    3. situations when vendors do not send month-end statements.
    1. bad internal control
  2. Accounts Payable confirmations are most frequently used in circumstances involving the following

    1. bad internal control
    2. ---------------------------
    3. situations when vendors do not send month-end statements.
    2. bad financial position
  3. Accounts Payable confirmations are most frequently used in circumstances involving the following

    1. bad internal control
    2. bad financial position
    3. ---------------------------------
    3. situations when vendors do not send month-end statements.
  4. Accounts Payable confirmations are most frequently used in circumstances involving the following

    1. ----------------------------

    2. -------------------------

    3. --------------------------
    • 1. bad internal control
    • 2. bad financial position
    • 3. situations when vendors do not send month-end statements.
  5. Confirmations for payables are sent to the following.

    1. --------------------------------
    2. -----------------------------
    3. ----------------------------
    • 1. major suppliers
    • 2. disputed accounts
    • 3. a sample of other suppliers
  6. What is the search for unrecorded liabilities?
    The search for unrecorded liabilities is an effort to discover any liabilities that may have been omitted from recorded year end payables.
  7. What is an effort or discover any liablilites that may have been omitted from recorded year end payables.
    search for unrecorded liabilities
  8. What are typical procedures for search for unrecorded liabilities?
    1.Examination of vendors invoices and statements both immediately prior to and following year-end.

    2. Examination after year end of the following to test whether proper cutoffs have occurred.

    3. Analytical procedures

    4. Internal control is analyzed to evaluate its it's effectiveness in preventing and detecting the occurrence of such misstatements.
  9. Bill and hold transactions are when -----------------------------------------
    Bill and hold transactions are when a customer agrees to purchase goods but the seller retains physical possession until the customer request shipment to designed locations.
  10. ----------------------------- are when a customer agrees to purchase goods but the seller retains physical possession until the customer request shipment to designed locations.
    Bill and hold transactions are when a customer agrees to purchase goods but the seller retains physical possession until the customer request shipment to designed locations.
  11. The ------------------------- should be addressed to the auditor in a letter dated no earlier than the date of the auditors report.
    The representation letter should be addressed to the auditor in a letter dated no earlier than the date of the auditors report.
  12. The representation letter should be addressed to the ------------ in a letter dated ------------------------- date of the auditors report.
    The representation letter should be addressed to the auditor in a letter dated no earlier than the date of the auditors report.
  13. The clients -------------------- is the primary source for corroboration of information obtained from the client concerning loss contingencies.
    The clients lawyer is the primary source for corroboration of information obtained from the client concerning loss contingencies.
  14. Fair value is generally considered -----------------------------
    Fair value is generally considered to be the amount at which an asset could be bought or sold in a current transaction between willing parties.
  15. --------------------- is generally considered to be the amount at which an asset could be bought or sold in a current transaction between willing parties.
    Fair value is generally considered to be the amount at which an asset could be bought or sold in a current transaction between willing parties.
  16. subsequent events are classified into two types

    1. --------------------------------

    2. Events that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.
    1. events that provide additional evidence with respect to conditions that existed at the date of the balance sheet.
  17. subsequent events are classified into two types

    1. events that provide additional evidence with respect to conditions that existed at the date of the balance sheet.

    2. -----------------------------
    2. Events that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.
  18. subsequent events are classified into two types

    1. -------------------------

    2. --------------------------
    1. events that provide additional evidence with respect to conditions that existed at the date of the balance sheet.

    2. Events that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.
  19. The auditor should perform audit procedures to obtain sufficient appropriate audit evidence that subsequent events that require adjustments or disclosure have been identified including the following.

    1. ------------------------------

    2. Inquiring of management about subsequent events.

    3. Reading minutes

    4. Reading the latest subsequent interim financial statements.
    1. Obtaining an understanding of managements procedures for identifying subsequent events.
  20. The auditor should perform audit procedures to obtain sufficient appropriate audit evidence that subsequent events that require adjustments or disclosure have been identified including the following.

    1. Obtaining an understanding of managements procedures for identifying subsequent events.

    2. -------------------------------

    3. Reading minutes

    4. Reading the latest subsequent interim financial statements.
    2. Inquiring of management about subsequent events.
  21. The auditor should perform audit procedures to obtain sufficient appropriate audit evidence that subsequent events that require adjustments or disclosure have been identified including the following.

    1. Obtaining an understanding of managements procedures for identifying subsequent events.

    2. Inquiring of management about subsequent events.

    3. -----------------------------

    4. Reading the latest subsequent interim financial statements.
    3. Reading minutes
  22. The auditor should perform audit procedures to obtain sufficient appropriate audit evidence that subsequent events that require adjustments or disclosure have been identified including the following.

    1. Obtaining an understanding of managements procedures for identifying subsequent events.

    2. Inquiring of management about subsequent events.

    3. Reading minutes

    4. ----------------------------
    4. Reading the latest subsequent interim financial statements.
  23. The auditor should perform audit procedures to obtain sufficient appropriate audit evidence that subsequent events that require adjustments or disclosure have been identified including the following.

    1. -------------------

    2. --------------------

    3. -------------------

    4. ------------------------
    1. Obtaining an understanding of managements procedures for identifying subsequent events.

    2. Inquiring of management about subsequent events.

    3. Reading minutes

    4. Reading the latest subsequent interim financial statements.
  24. If subsequently discovered facts that become known to the auditor after the report release date the auditor should discuss the matter with management and determine whether the financial statements need to be amended.  If they are amended the auditor should

    1. Either extend the audit procedures or dual date the report.

    2. Determine that proper steps are taken to inform anyone who might be using the misstated financial statements.

    3. ---------------------------
    3. if the auditors opinion differs from that previously expressed describe the situation in an emphasis of matter or other matter paragraph.  That paragraph should include the date of the previous report, type of opinion, reasons for the different opinion and that the auditor opinion differs from that in the previous opinion.
  25. If subsequently discovered facts that become known to the auditor after the report release date the auditor should discuss the matter with management and determine whether the financial statements need to be amended.  If they are amended the auditor should

    1. Either extend the audit procedures or dual date the report.

    2. -----------------------------

    3. if the auditors opinion differs from that previously expressed describe the situation in an emphasis of matter or other matter paragraph.  That paragraph should include the date of the previous report, type of opinion, reasons for the different opinion and that the auditor opinion differs from that in the previous opinion.
    2. Determine that proper steps are taken to inform anyone who might be using the misstated financial statements.
  26. If subsequently discovered facts that become known to the auditor after the report release date the auditor should discuss the matter with management and determine whether the financial statements need to be amended.  If they are amended the auditor should

    1. ---------------------------------

    2. Determine that proper steps are taken to inform anyone who might be using the misstated financial statements.

    3. if the auditors opinion differs from that previously expressed describe the situation in an emphasis of matter or other matter paragraph.  That paragraph should include the date of the previous report, type of opinion, reasons for the different opinion and that the auditor opinion differs from that in the previous opinion.
    1. Either extend the audit procedures or dual date the report.
  27. If subsequently discovered facts that become known to the auditor after the report release date the auditor should discuss the matter with management and determine whether the financial statements need to be amended.  If they are amended the auditor should

    1. --------------------

    2. ------------------------

    3. ------------------------
    1. Either extend the audit procedures or dual date the report.

    2. Determine that proper steps are taken to inform anyone who might be using the misstated financial statements.

    3. if the auditors opinion differs from that previously expressed describe the situation in an emphasis of matter or other matter paragraph.  That paragraph should include the date of the previous report, type of opinion, reasons for the different opinion and that the auditor opinion differs from that in the previous opinion.
  28. --------------------- is the risk that a misstatement that could occur in an assertion about a class of transaction, account balance, or disclosure, and that could be material either individually or when aggregated with other misstatements, will not be prevented, or detected and corrected on a timely basis by the entity's internal control.
    control risk is the risk that a misstatement that could occur in an assertion about a class of transaction, account balance, or disclosure, and that could be material either individually or when aggregated with other misstatements, will not be prevented, or detected and corrected on a timely basis by the entity's internal control.
  29. control risk is the risk that ------------------------------------------
    control risk is the risk that a misstatement that could occur in an assertion about a class of transaction, account balance, or disclosure, and that could be material either individually or when aggregated with other misstatements, will not be prevented, or detected and corrected on a timely basis by the entity's internal control.
  30. detection risk is the risk that ---------------------------------------------
    detection risk is the risk that the procedures preformed by the auditor to reduce audit risk to an acceptably low level will not detect a misstatement that exists and that could be material either individually or when aggregated with other misstatements.
  31. --------------------- is the risk that the procedures preformed by the auditor to reduce audit risk to an acceptably low level will not detect a misstatement that exists and that could be material either individually or when aggregated with other misstatements.
    detection risk is the risk that the procedures preformed by the auditor to reduce audit risk to an acceptably low level will not detect a misstatement that exists and that could be material either individually or when aggregated with other misstatements.
  32. What are the two components of risk of material misstatement?
    1. inherent risk

    2. control risk
  33. What are inherent risk and control risk components of?
    risk of material misstatement.
  34. Risk assessment procedures are audit procedures that are ---------------------------------------------------
    Risk assessment procedures are audit procedures that are preformed to obtain an understanding of the entity and its environment including the entity's internal control to identify and assess the risks of material misstatement whether due to fraud or error, at the financial statement and assertion level.
  35. ---------------------------- are audit procedures that are preformed to obtain an understanding of the entity and its environment including the entity's internal control to identify and assess the risks of material misstatement whether due to fraud or error, at the financial statement and assertion level.
    Risk assessment procedures are audit procedures that are preformed to obtain an understanding of the entity and its environment including the entity's internal control to identify and assess the risks of material misstatement whether due to fraud or error, at the financial statement and assertion level.

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