You complete me
Approved purchase order, receiving report, and vendor invoice
What is the voucher package?
Existence is when customers agree with the amount they owe the client per this audit procedure.
What is A/R confirmation?
In class we tested this management assumption when we audited an A/R reserve.
What is the % estimated to be uncollectible in each aging bucket?
Auditors need to be extra careful when doing SAPs using data from this source.
What is the client?
What is 2?
When searching for unrecorded liabilities, you may want to request this from your client's bank to make selections.
What is a cut-off bank statement?
Existence is when you test an A/R balance by selecting a sample from this.
What is the A/R subledger or A/R aging report?
When testing management's process for developing an estimate, auditors must evaluate the client's ________ and assumptions (hint: starts with M).
What is method or model?
This is the main difference between a planning analytical procedure and a substantive analytical procedure.
What is the objective of the procedure?
The PCAOB is fully funded by these.
What are registered public accounting firms?
This event determines when a liability should be recorded (assuming FOB destination)
What is the receipt of goods?
Existence is least effectively tested with this type of confirmation, which doesn't require a response.
What is a negative confirmation?
These are the three approaches auditors can use to test estimates.
What are testing management's process, developing an independent estimate, and evaluating subsequent events?
This is the very first thing an auditor should do when using SAPs.
What is consider whether it makes sense to do an SAP?
The PCAOB's mission is to safeguard these people.
Who are the investing public?
When searching for unrecorded liabilities, you may come across this type of liability in addition to accounts payable. So sue me!
What are contingent liabilities?
Existence is typically associated with this direction of misstatement.
What is overstatement?
Estimates are unique among financial statement accounts because they are especially susceptible to this.
What is management bias?
Be sure to do this before comparing your expectation to the client's recorded balance (hint: it's not C&A testing).
What is set a tolerable difference threshold?
If you want to be on the PCAOB one day, you should consider pursuing one of these professions other than accounting.
What is a lawyer or an economist?
Companies use pre-numbered receiving reports to control for the risk of understatement of this account.
What is accounts payable?
Existence is often tested with confirmations because the resulting audit evidence comes from a party with this characteristic.
What is independence from the client?
Seemingly small management biases in estimates can lead to material misstatement for this reason.
What is the collective or accumulated effect of management bias across the f/s?
Even if the data are complete and accurate, a substantive analytical procedure won't be effective if the data lack this.
What is a plausible relationship between data?
In addition to registering public accounting firms, setting standards, and inspecting audits, the PCAOB has a duty to do this.