The process ranging from the initiation of a sales transaction, to shipping a product , billing the customer, and collecting cash for the sale or writing off of uncollectible receivables.
What is the revenue cycle?
100
A technique used to reconcile the cash receipts and disbursements recorded on the client's books with the cash deposited into and disbursed from the client's bank account for a specific time period.
What is the proof of cash?
100
A letter that corroborates oral representations made to the auditor by management and documents the continued appropriateness of such representations.
What is the representation letter?
100
An opinion that financial statements are not fairly stated.
What is an adverse opinion?
100
The risk that an auditor will give a clean opinion on financial statements that are materially misstated.
What is audit risk?
200
Auditors are normally concerned with overstatement of these.
What are assets and revenues?
200
The auditor's use of substantive analytical procedures for auditing _______ is limited to comparison with prior years' balances and budgeted amounts.
What is cash?
200
This letter is used to make recommendations to the client based on observations made during the audit?
What is the management letter?
200
This contains the introductory paragraph, scope paragraph, opinion paragraph, and the internal control paragraph
What is the standard, unqualified opinion?
200
The portion of planning materiality allocated to specific accounts.
What is tolerable misstatement?
300
Procedures applied to transactions selected from those recorded during the end of fiscal period to provide evidence as to whether the transactions have been recorded in the proper period.
What are cutoff tests?
300
This is a major control that directly affects the audit of cash. It is completed by client personnel who are independent of the handling and recording of cash receipts and cash disbursements.
What is the monthly bank reconciliation?
300
Events that provide additional evidence about the conditions that existed at the date of the balance sheet and affect the estimates that are part of the financial statement preparation process. These events require adjustment of the financial statements.
What are Type I subsequent events?
300
The auditor _____________ his or her opinion when either a scope limitation or a specific departure from GAAP exists, but overall the financial statements are presented fairly in conformity with GAAP.
What is qualifies?
300
The combination of inherent risk and control risk.
What is the risk of material misstatement?
400
A request to customers asking them to respond directly to the auditor if they agree or disagree with the indicated balance.
What is a confirmation?
400
A bank account containing a stipulated amount of money used for limited purposes.
What is an imprest account?
400
An existing condition or set of circumstances involving uncertainty about a possible loss that will ultimately be resolved when some future event occurs or fails to occur.
What is a contingent liability?
400
A lack of evidence that may preclude the auditor from issuing a clean opinion, usually resulting from an inability to conduct an audit procedure considered necessary.
What is a scope limitation?
400
The organization responsible for setting auditing standards for audits of publicly-traded companies in the US.
What is the PCAOB?
500
Persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the seller's price to the buyer is fixed or determinable, and collectibility is reasonably assured.
What are the criteria for revenue recognition?
500
Th price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
What is fair value?
500
The auditor has a responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a ___________________ for a reasonable period of time.
What is going concern?
500
If a publicly-held company issues financial statements that purport to present its financial position and results of operations but omits the statement of cash flows, the auditor ordinarily will express this type of opinion.
What is an unqualified opinion with a separate explanatory paragraph?
500
An audit in which the same auditor must attest to both the financial statements and management's assertions regarding the effectiveness of internal controls over financial reporting.