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2011-08-22 22:24:13
audit becker cpa exam evidence documentation

A4 Audit Evidence flashcards
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  1. audit documentation
    • indicate that accounting records=f/s
    • enough detail so "experiences auditor" with no prior connection to audit can understand procedures done
    • demonstrate compliance with standards of fieldwork
  2. documentation completion date
    • SAS (nonissuers)=60 days following report release date
    • PCAOB(issuers)=45 days following report release date
  3. permanent file
    • year to year
    • contracts, pensions, bylaws, articles of incorp., meeting minutes
  4. current file
    • all documentation applicable to year under audit
    • plan, f/s, records of tests, significant audit findings
  5. types of accounting evidence
    • underlying accounting records=tested through retracing, recalculation, reconcilliation
    • corroborating evidence=obtained through observation, inquiry and inspection. gives validity to accounting records
  6. sufficiency of audit evidence (valid and relevent)
    • quantity of evidence
    • more RMM=more evidence required
    • higher quality of evidence=less required
  7. appropriateness of evidence (reliable and relevant)
    most to least reliable=auditors knowledge and observation, external from independent sources, internal (better i/c gives more reliability), oral (more reliable if documented)
  8. substantive procedures
    • substantiate the validity of mngt assertions
    • tests of details
    • substantive analytical procedures
  9. directional testing
    • type of tests of details
    • Vouching
    • Tracing
  10. Vouching
    • vouch from journal/accounting entries to source documents
    • tests for existence by obtaining support
    • considers the risk of overstatment (usually of assets/revenue)
  11. Tracing
    • trace from source documents to journal/accounting entries
    • tests for completeness by obtaining coverage
    • makes sure all transactions are included in the documentation
    • considers the risk of understatement (usually of liabilities/expenses)