Ch. 1-3
This auditor behavior reflects a level of performance that would be exercised by reasonable auditors in similar circumstances.
What is due care?
This type of financial analysis expresses Balance Sheet accounts as percentage of total assets.
What is a vertical analysis?
This type of accounts receivable confirmation would be used for an audit that has a large number of small balances involved.
What are negative confirmations?
These procedures allow auditors to evaluate financial information by studying relationships among both financial and nonfinancial data.
What are analytical procedures?
This entity is responsible for for developing standards for the audits of issuers.
Who is the PCAOB? (or What is the PCAOB?)
This relates to financial statement users’ perceptions of auditors’ independence.
What is independence in appearance?
This is defined as the risk that an auditor's procedures will lead to the conclusion that a material misstatement does not exist in an account balance when, in fact, such misstatement actually exists is.
What is detection risk?
These are the two significant accounts involved with the audit of inventory.
What are cost of goods sold and inventory?
This opinion is issued when the financial statements are presented in conformity with GAAP, except for one or more departures or issues of concern.
This entity must formally approve the Auditing Standards.
What is the SEC?
This management assertion is addressed by the auditor's review of credit ratings of a client's customers.
What is valuation (and allocation)?
This is defined as the periodic review of an audit firm's system of quality control by the PCAOB.
What is an inspection?
This assertion is not one of the relevant assertions for revenue.
What is valuation?
When evaluating the materiality of uncorrected misstatements, this method only considers the current-period income effect(s).
What is the rollover method?
This is often viewed as the dollar amount that would influence the lending or investing decisions of financial statement users.
What is materiality?
This organization is primarily responsible for ensuring that public officials are using public funds efficiently, economically, and effectively.
What is the Government Accountability Office (GAO)?
This is referred to as a set of characteristics that helps to define a seriousness about employees' attitudes about the control activities in a company.
What is the control environment?
This assertion is addressed by the following audit procedure for inventory: Trace test counts from inventory observation to the final inventory compilation.
What is the completeness assertion?
This is approved by the board of directors that constitutes the authorization for major capital asset acquisitions and investments.
What is a capital budget?
These two types of risks comprise the risk of material misstatement.
What are inherent risk and control risk?
Generally accepted auditing standards require that auditors always prepare and use....
What is a written audit plan?
An auditor assesses the risk of material misstatement because it affects the level of _____________ that the auditor may accept.
What is detection risk?
This assertion is addressed by the following audit procedures for inventory: Agree prior year amounts to prior year audited financial statements.
What is the valuation assertion?
Circumstances beyond the audit team's and client's control such as the late appointment of the audit team that leads to their inability to perform certain auditing procedures is known as...
What is the a circumstance-imposed scope limitation?
These two attributes must be present for audit evidence to be considered appropriate.
What is reliable and relevant?