Audit Fundamentals
The primary objective of an external audit
What is to express an opinion on whether the financial statements are presented fairly in all material respects?
Under ASC 606, how many steps are there in the revenue recognition model?
What is five?
This is the process designed to provide reasonable assurance regarding the achievement of objectives in operations, reporting, and compliance.
What is internal control?
This set of authoritative standards guides the preparation and presentation of private company financial statements in the United States.
What are U.S. Generally Accepted Accounting Principles (GAAP)?
This team member played the clarinet and the saxophone for 7 years and was in concert and Jazz Band in High School
Amanda Harvie
The document provides evidence that audit procedures were performed and conclusions were reached.
What is the audit workpaper (or audit documentation)?
Revenue is generally recognized when this criterion is met.
What is when control of the goods or services is transferred to the customer?
Who is responsible for establishing and maintaining internal controls?
What is management?
Which financial statement would you review to evaluate a company's ability to meet its short-term obligations?
What is the balance sheet?
Which team member is missing their front top teeth?
Cliff
The process where an auditor assesses the magnitude and likelihood of an identified misstatement affecting the overall fairness of the financial statements.
What is evaluating materiality?
What is the term for the risk that revenue is overstated due to fictitious sales?
What is the risk of fraud (or revenue recognition fraud)?
What is the purpose of segregating duties among employees?
What is to reduce the risk of error or fraud?
GAAP requires private companies to present this reconciliation to show how net income translates to cash during the year.
What is the statement of cash flows?
Which Commercial team member enjoys olives with a beer?
Dan Stanhope
The first step in planning an audit.
What is gaining an understanding of the client and its environment?
When auditing contracts with customers, what document is most important to review?
What is the customer sales agreement (or contract)?
Which type of control is designed to detect errors or fraud after they have occurred?
What are detective controls?
This is the term for costs that have been incurred but not yet paid or recorded.
What are accrued expenses?
Which commercial pod team member was eloped and married in another country?
Nicole (Australia)
The term for an audit procedure that verifies the existence of accounts receivable.
What is confirmation?
Under ASC 606, what is the term for the price allocated to each distinct good or service promised in a contract?
What is the transaction price?
What is the process of tracing a transaction from origination to final recording called?
What is a walkthrough?
Which section of the cash flow statement includes cash paid for inventory?
What is the operating activities section?
Which commercial POD member has a cousin who plays in the NBA?
Stefani