CH 7 DEFINITIONS

Compute

A calculation done by the auditor independent of the client.

Observe

A use of the senses to assess certain activities.

Trace

Following details of transactions from original documents to journals

Confirmation

the auditor's receipt of a direct written/electronic response from a 3rd party verifying the accuracy of info requested

Compare

A comparison of information in two different locations.

Count

A determination of assets on hand at a given time.

External document

A document that has been used by an outside party to the transaction being documented and that the client now has/can easily obtain

Scan

A less detailed examination of a document or record to determine if there is something unusual warranting further investigation

Working TB

A listing of the general ledger accounts and their year end balances

Appropriateness of Evidence

A measure of the quality of evidence

Foot

Addition of a column of numbers to determine if the total is the same as the client's.

Current Files

All audit files applicable to the year under audit

Read

An examination of written information to determine facts pertinent to the audit

Lead Schedule

Audit schedule that contains detailed accounts from the general ledger making up a line item total in the working TB

Audit documentation

Contains all the information that the auditor considers necessary to conduct an adequate audit and to provide support for the audit report.

Audit procedures

Detailed instructions for the collection of a type of audit evidence.

Supporting Schedules

Detailed schedules prepared by the client/the auditor in support of specific amounts on the FS

Audit Program

List of audit procedures for an audit area/an entire audit

Inquire

Obtaining information from the client in response to specific questions

Reliability of evidence

The degree to which evidence can be considered believable or trustworthy

Vouching

The use of documentation to support recorded transactions/amounts

Sufficiency of evidence

This is determined by the amount of evidence obtained.

Analytical procedures

Use of comparisons and relationships to assess the reasonableness of account balances.

Substantive Analytical Procedure

an analytical procedure in which the auditor develops an expectation of recorded amounts/ratios to provide evidence supporting an acct balance

Inspection

the auditor's examination of the client's documents & records to substantiate the information that is/should be included in the FS

Reperformance

the auditor's independent tests of client accounting procedures or controls that were originally done as part of the entity's accounting and internal control system

Persuasiveness of Evidence

the degree to which the auditor is convinced that the evidence supports the audit opinion

Budgets

written records of the client's expectations for the period