Research and IT
Research tool you would use to find guidance on how to audit a section?
Advance CPA/GAM
The primary assertion related to fixed assets?
Existence, valuation
The primary audit procedure to test AP?
Search for Unrecorded Liabilities/AP Search
The 3 levels of assurance that can be obtained from substantive analytical procedures
Low, Medium, High
The 2 primary assertions we are testing with regard to cash.
$50 if you get one
Existence and Cutoff
Research tool you would use to look up the FASB Codification as well as auditing and accounting standards?
ARM (Accounting Research Manager)
The primary audit procedure used to test fixed assets
Testing client prepared roll forward of fixed assets
The primary assertion related to AP?
Completeness, Cutoff
Sampling technique whereby the auditor sorts the population based on the account balance and then selects items for testing in descending order until a certain monetary amount of coverage has been achieved.
High Value Scoping
The name of the tool used primarily to convert a PDF into an Excel File
IDEA
The name of the report we obtain that focuses on internal controls over financial reporting for service organizations?
SOC 1 Report
What do we typically look for when testing fixed asset additions?
Properly capitalized, properly recorded, existence, properly approved, proper useful life, proper depreciation calculation
The financial statement level risk with AP?
Understatement
The highest number of occurrences in a “small population”
250 occurrences
The name of the IT practice at BNN?
ISRA (Information Systems and Risk Assurance)
Potential issues/areas to look out for when testing fixed assets?
Impairment, gains and losses on sales, improper capitalization, leases, capitalization policy, capitalized interest for long-term projects
If there is an error/cutoff issue in AP testwork
Answer: Discuss with senior, document in non-stat form, possibly more selections
Definition: Amount set by auditor, of which, the auditor seeks assurance the actual misstatement in the population does not exceed
Performance Materiality
One of the 3 major risks when auditing Cash
BONUS POINTS ($50 each for the others)
1.Theft of cash by employees
2. Lapping/kiting
3. Deposit processed by the bank, but not yet recorded on the GL
What is one example of a common IT general control area?
$50 for each additional
1. User Access
2. New Users/Transfers of Access Rights/Terminated Users
3. Data Back-Ups and Disaster Recovery
4. Physical Security
5. Passwords
6. Change/Access Management
The expense account that is typically tested alongside fixed assets to determine whether assets are properly capitalized?
Repairs and maintenance expense
A common inquiry of the client related to AP
1. Disputed invoices
2. credit memos after year-end,
3. unvouchered/un-invoiced receipts
4. non-entered invoices
5. economic dependency
The rate of deviation within the sample the auditor is willing to accept
Tolerable rate of deviation
In regards to cash transfer testing between different financial institutions, how many business days does BNN normally review before and after year end?
10 business days