Evaluation of Audit Evidence
The ability to ____ evidence appropriately is an important skill the auditor must develop.
What is Evaluate
Evaluations of financial information through analysis of plausible relationships among financial and non financial data.
What are Substantive Analytical Procedures
The three categories of audit procedures used to gather evidence about whether specific assertions are being met.
What are Risk assessment procedures, Test of controls, and Substantive procedures.
Assets and inventory are examples of this type of evidence.
What is Physical Evidence?
The auditor asks the credit manager a question and gets a response that is favorable towards company objectives. The auditor also inquiries confirmation through an outside vendor over the same issue but gets an opposing response. The auditor should be worried about this concept, critical to the evaluation of audit evidence
What is Bias
Significant differences identified by substantive analytical procedures indicate there could be an increased likelihood in these, which may result in an unfavorable audit report.
What are Material Misstatements
The procedure is a highly reliable method that an auditor uses to check the mathematical accuracy of documents or records. An example could be an auditor checking the accuracy of depreciation on fixed assets.
What is Recalculation
You would get this type of evidence from performing recalculations
What is Computational Evidence
This professor is the instructor for auditing at the undergraduate level at Stephen F. Austin State University.
Who is Professor Janet Jones, obviously.
Explanations for significant differences observed by substantive analytical procedures must be followed up and resolved through these three key concepts.
What are Quantification, Corroboration, and Evaluation.
This procedure is an auditor’s exercise of professional judgement to review accounting data to identify significant or unusual items to test. Sometimes used in conjunction with analytical procedures.
What is Scanning
Any information that corroborates or refutes the auditors’ premise that the financial statements present fairly the client’s financial position and operating results
What is Audit Evidence
In evaluating evidence an auditor should be ____ in searching for evidence and ____ in its evaluation.
What are Thorough and Unbiased
Three types of analytical procedures.
What are Trend Analysis, Ratio Analysis, and Reasonableness Analysis
This particular audit procedure is a physical examination of the assets. One example is an auditor counting the cash on hand.
What is Inspection of Tangible Assets
This type of accounting evidence is viewed as more reliable than internal evidence.
What is External Evidence
An auditor must determine a sufficient amount of this before attesting to the fair representation of the company financial statements
What is Evidence
To achieve the desired level of assurance with substantive analytical procedures, the auditor will use this type of difference, which should not be less than the observed difference.
What is Tolerable Difference
This category of audit procedures is used to obtain an understanding of the entity and it’s environment.
What are Risk assessment procedures
This is used to process, summarize, and report the company’s transactions in a majorly computerized system.
What is an Accounting Information System