Definitions
What is...
An invoice
what is the problem that needs to be assessed at the end of each year?
making sure each entry or bill is on the right year
the same must..
reflect the population as a whole
samples can never be truly random
true
segregation of duties separates what
authorization, recording, and reconciliation
separating authorizing, recording, and reconciliation
what is...
Segregation of Duties
this is a journal entry for what?
A/P
Cash
Check Run
increase in the auditors intended reliance on accounting and internal control system
increase in sample size
control risks increases, then the sample size decreases
false. sample size increases, can rely on controls
fraud will be eliminated
Recalculation
What is..
Checking the math and accuracy
February, to make sure that all December bills have arrived
how can we truly see if the sample represents the population?
test the entire population
the auditor must ordinarily use a confirm in response to a specific risk
true
ex) when you cut wood, and you get sawdust, you need to prepare for this.
inventory shrinkage
something you own that has a future benefit
asset
we've received a list of all payments made since 1/1 through "today"
check register
tolerable error
the amount of error willing to tolerate
the auditors independent execution of procedures or controls is recalculation
false, reperformance
involved two people committing fraud or knowledge of it
colluding
"F" represents what?
Footed, means you checked the math
what happens between FOB destination and FOB shipping point?
sample from the check register for accounts payable
confirmation
evidence gathering techniques include only
-inquiry
-observation
-inspection
-inquiry
-observation
-inspection
-recalculation
-reperformance
-confirmation
-analytical procedures
if the internal controls are weak in a public company, the auditor must..
test more controls, and do more work.all public companies must be audited.