Transactions and Events Assertions
Risk that fraudulent sales transactions are included within the sales register
What is occurrence?
Risk that client neglects to record their year end wages payable
What is completeness?
An auditor must ensure they can conduct the audit without bias due to financial ties or joint interests
What is auditor independence?
The audit engagement letter serves as this between the auditor and client
What is a contract?
A pride
What is a group of lions?
Risk that valid year end expenses are recorded in the next accounting period
What is cutoff?
Risk that inventory held on consignment is not segregated in the warehouse
What is rights and obligations?
An auditor must ensure key personnel do not display any 'red flags'
What is to perform background checks of management?
The primary purpose of an engagement letter
What is to establish a mutual understanding with the client?
What is a group of turkeys?
Risk that the sales transaction is recorded at an incorrect price
What is accuracy?
Risk that cash held in escrow as a security deposit is not shown as restricted cash
What is rights and obligations?
An auditor's inquiry specifically aiming to understand the integrity of management
What is to communicate with predecessor auditor?
What is fraud?
A tower
What is a group of giraffes?
Risk that expenses are not recorded
What is completeness?
Risk that accumulated depreciation is calculated without consideration of salvage value
What is valuation and allocation?
What are adequate audit resources?
To conduct an audit of the balance sheet and related financial statements as of a specific date for the purpose of expressing an opinion on them
What is the auditor's responsibility?
A cackle
What is a group of hyenas?
Risk that sales transactions are not collectible
What is occurrence?
Risk that outstanding checks are not reflected in the cash balance
What is existence?
An auditor specifically examines this special events form to identify any disagreements with prior auditors
What is a Form 8-K?
The preparation of financial statements
What is management's responsibility?
A parliament
What is a group of owls?