Audit Evidence
The auditor watches employees count inventory without performing the count themselves. This audit procedure is called what
Observation
Before accepting a prospective client, the successor auditor requests permission to communicate with who
Predecessor auditor
A CPA firm that designs a company’s financial-reporting controls and later audits those same controls is known as what type of independence threat
Self-review threat
Controls that are pervasive across the entire technological infrastructure at an audit client are called what
General controls
A stable, low risk, expense account with predictable relationships is often well suited for this type of audit procedure
The auditor sends a letter to the bank verifying the amount of cash in the bank at a specified time. This audit procedure is called what
Confirmation
The written agreement describing the audit objectives, management and the auditor’s responsibilities, and any limitations is called what
Engagement letter
A covered member’s spouse owns a material indirect interest in the audit client through an investment fund. State the likely independence conclusion
An auditor attempts to sign in with invalid credentials and reviews failed-login logs. This type of general control is being tested
Access to programs
The objective in an auditor’s review of a selection of credit ratings of an audit client’s customers is to obtain evidence related to which assertion (identify ONE)?
Valuation
A client-produced inventory report is used to select test items. Before relying on the report, the auditor must evaluate these two qualities of the information
Completeness & Accuracy
Comparison of current year account balances to balances of one or more comparable periods is know as what type of audit test
Analytical procedures
A partner or manager who provides 10 or more hours of nonattest services to the audit client is defined as what under the AICPA independence rules
Covered member
System developers are prevented from changing the system code without proper approval. This is an example of this type of general control
Program change controls
An auditor selects items from the client’s inventory listing and vouches them to purchase orders, invoices, and receiving reports. The assertion that is most directly being tested is (select ONE)
Existence
The auditor independently computes interest expense using the principle balance, interest rate, and period. This audit procedure is called what
Recalculation
This threshold represents the amount set below overall materiality to reduce the chance that aggregate uncorrected and undetected misstatements exceed overall materiality
Performance materiality
An audit client’s CEO and CFO urges the auditor to accept weak audit evidence and threatens to replace the audit firm. This most directly illustrates what independence threat
Undue influence threat
This group of automate application controls represents the final check on the accuracy of the results of automated transaction processing
Output controls
A control process requires supervisor approval, but there is no audit evidence of a signature, timestamp, or electronic log. The auditor would most likely test this control using these two audit procedures
Inquiry and observation
The auditor selects recorded equipment additions and examines invoices, titles, and the physical assets. What is the name of the direction of this audit testing procedure
Vouching
When evaluating when to use the work of internal auditors, external auditors must consider internal auditors' objectivity and what
Competence
A covered member’s spouse cannot have an indirect financial interest in an audit client if it is what
Material
A system rejects a new customer's credit limit because it exceeds a predetermined limit set in the system. This is an example of what type of input control
Limit/reasonableness test
A CFO reviews a monthly gross-margin report, investigates unexpected changes, and signs the report. This is best classified as what type of control
Entity-level control (or management review control)