Auditing - Chapter 5

Evaluations of financial information through analysis of plausible relationships among both financial and nonfinancial data

Analytical Procedures

Expressed or implied representations by management regarding the recognition, measurement, presentation, and disclosure of information in the financial statements and related disclosures.

Assertions

Information used by the auditor in arriving at the conclusions on which the auditor's opinion is based; includes both information contained in the accounting records underlying the financial statements and other information.

Audit Evidence

___________ represents audit evidence obtained by the auditor as a direct written response to the auditor from a third party in paper or electronic form.

External Confirmation

Seeking information of knowledgeable persons, both financial and non financial, within the entity or outside the entity.

Inquiry

What are the four medium reliabilities?

Inspection of records and documents Confirmation Analytical procedures Scanning

Examination of internal or external records or documents that are in paper or electronic form

Inspection of records or documents

Physical examination of the tangible assets.

Inspection of tangible assets

There is a(n) ___________ relationship between the sufficiency and appropriateness of audit evidence.

Inverse

Summary of components of a working account

Lead schedule

Process of watching a process or procedure being performed by others

Observation

What are the two low reliabilities?

Observation Inquiry

The auditor's checking the mathematical accuracy of documents or records either manually or electronically.

Recalculation

____________ refers to its relationship to the assertion or to the objective of the control being tested

Relevance

The relationship to the assertion can be relied on to signal the true state of the assertion.

Relevance of evidence

Evidence is considered appropriate when it is _____________ and ____________.

Relevant and reliable.

_________ also means validity.

Reliability

___________ refers to whether a particular type of evidence can be relied upon to signal the true state of an assertion.

Reliability

____________ is influenced by its source and by its nature and is dependent on the individual circumstances under which it is obtained.

Reliability

The auditor's independent execution of procedures or controls that were originally performed as part of the entity's internal control, either manually or through the use of computer assisted audit techniques.

Reperformance

Reviewing accounting data to identify significant or unusual items.

Scanning

____________ is the measure of the quantity of audit evidence; ___________ is the measure of the quality.

Sufficiency; appropriateness

Tracing deals with ____________.

completeness

Notations that are made by the auditor near, or next to, an item or amount on an audit document

tick mark

Specific acts performed by the auditor in gathering evidence to determine if specific assertions are being met.

Audit procedures

Vouching deals with ___________.

Existing

What are the three different types of high reliabilities?

Inspection of tangible assets Reperformance Recalculation

Auditing documentation is also called ________________________.

Working papers