It includes the objectives of the engagement, management's responsibilities, auditor's responsibilities, and any auditor limitations
What is Engagement Letter
100
the probability that the client's internal control activities will fail to prevent or detect material misstatements, provided any enter or would have entered the accounting system in the first place
What is control risk
100
fraud perpetrated by people who work in offices and steal with a pencil or a computer terminal
What is White-collar crime
100
auditor selects an item of financial information, usually from a journal or ledger, and follows its path back throughout the processing steps to its origin
What is vouching
100
is utilized whenever auditors view the client's physical facilities and personnel on an inspection tour, when they watch personnel carry out accounting and control activities, and when they participate in a surprise payroll distribution.
What is observation
200
is a list of the audit procedures that the audit team needs to perform to gather sufficient appropriate evidence on which to base their opinion on the financial statements
What is audit plan
200
the probability that audit procedures will fail to produce evidence of material misstatements, provided any have entered or would have entered the accounting system in the first place and have not been prevented or detected and corrected by the client's control activities
What is detection risk
200
knowingly making material misrepresentations of fact with the intent of inducing someone to believe the falsehood and act on it and thus, suffer a loss or damage.
What is fraud
200
Auditor selects a basic source document and follows its processing path forward to find its final recording in a summary journal or ledger
What is tracing
200
.....by direct correspondence with independent parties is a procedure widely used in auditing
What is confirmation
300
contain the specifications of procedures for obtaining an understanding of the client's business and internal control and for assessing the inherent risk and the control risk related to the financial account balances and classes of transactions
What is internal control audit plan
300
the probability that the information circulated by an entity will be false or misleading
What is information risk
300
a type of fraud involving employees or non employees wrongfully taking money or property entrusted to their care, and control, often accompanied by false accounting entries and other forms of lying and cover up
What is embezzlement
300
the way auditors exercise their general alertness to unusual items and events in clients' documentation
What is scanning
300
auditor recalculation of calculations previously performed by client personnel produces compelling mathematical evidence
What is recalculation
400
contain the specification of substantive procedures for gathering direct evidence on managements assertions about amounts and disclosures in the financial statements.
What is substantive audit plans
400
the probability that, in the absence of internal controls, material errors or frauds could enter the accounting system used to develop financial statements.
What is inherent risk
400
intentional or reckless conduct whether by act or omission, that results in materially misleading financial statements
What is fraudulent financial reporting
400
includes examine property, plant, and equipment, inventory and securities certificates. Physical inspection of tangible assets provides compelling evidence of existence.
What is inspection of tangible assets
400
Can involve any client control procedure such as matching vendor invoices with supporting purchase orders and receiving reports
What is reperformance
500
contains the introductory paragraph, scope paragraph, opinion paragraph, and the internal control paragraph
What is The standard report
500
the risk that the auditor will express an inappropriate audit opinion when the financial statements are materially misstated
What is audit risk
500
violations of law and regulations that are far removed from financial statement effects
What is indirect-effect illegal acts
500
is a procedure that generally involves the collection of oral evidence from independent parties and management
What is inquiry
500
auditors can evaluate financial statements accounts by studying and comparing relationships among financial and non financial data