ACCT 440: CH5-6
Characteristics that may signal important information to the auditor about management's ____________ and ___________ values include management's approach to taking and monitoring business risks and their attitudes and actions toward financial reporting
integrity and ethical
Auditors may test controls at an ___________ date because the assertion being tested may not be significant, the control has been effective in prior audits, or it may be more efficient to conduct the tests at that time
interim
duplicate copies of invoices and shipping remittances are examples of ___________ documents
internal
An important role in how management meets its stewardship or agency responsibilities is played by _____________ ____________
internal control
the working papers document the
correspondence of the financial statements with GAAP basis for the audit report decision scope of the audit was adequate
data or documents from the accounting records and other documentary information such as contracts represents ___________ evidence
corroborating
important information on the ability of the entity to continue as a going concern are provided by _______ ratios
coverage
an auditor examining shipping documents to ensure that no prior period sales have been recorded in the current year is testing which assumption
cutoff
The level of ___________ risk is used to determine the nature, timing, and extent of substantive testing
detection
monitoring is done to
determine if internal control components are present and functioning
procedures manuals, organization charts, internal control questionnaires, flowcharts and narrative descriptions are all tools for ____________ the auditor's understanding of internal controls
documenting
For a control system to be considered ___________, each of the five components and relevant principles must be present and functioning, and the five components must operate together in an integrated manner.
effective
Knowledge of the information system is important to understand the related accounting records when they are
electronic or manual
the PCAOB requires the auditor to identify all significant findings or issues in a(n) __________ _______________ ______________
engagement completion memorandum
Information the is complete, neutral and free from error has the characteristic of __________ ________
faithful representation
T/F: auditing standards dictate how audit documentation should be organized
false
T/F: based on the nature of electronic audit evidence, auditors should only do sampling at year-end
false
T/F: how the components of internal control are implemented is not impacted by the size of the entity
false
from the auditor's perspective, a(n) _________ is a diagrammatic representation of the entity's accounting system
flowchart
the auditor's understanding of an entity's internal control over financial reporting are documented using a(n) ____________
flowchart
____________ controls relate to the overall information processing environment and have a pervasive effect on the entity's computer operation and are sometimes referred to as supervisory, management or information technology controls
general
controls over network operations are included as part of _______ _________ which relate to the overall information processing environment
general controls
the accuracy assertion is based on
GAAP
when an entity's system of ___________ ____________ is considered effective, evidence generated by the accounting system is viewed as reliable
internal control
the auditor's understanding of __________ is used to identify the controls that are likely to prevent, or detect and correct, material misstatement in specific assertions
internal controls
what type of relationship exists between the sufficient and appropriateness of audit evidence
inverse relationship
Identify the fraud risk factors that organizations must consider in assessing risks to the achievement of objectives
opportunities rationalization incentives
A rule or guideline that calls for certain activities to take place in certain circumstances is known as a(n) _____________
policy
two types of confirmations:
positive and negative
the quality of an expectation is referred to as the __________ of the expectation
precision
significant fluctuations in this ratio may indicate that selling, general and administrative expenses are misstated
profit margin
modeling the association between certain elements of the balance sheet and related income statement accounts is typically done using ___________ analysis
reasonableness
footing, crossfooting, reconciling subsidiary ledgers and testing postings are all examples of ____________
recalculation
to properly present information on the financial statements a(n) __________ entry that affects either the income statement or the balance sheet must be made
reclassification
assertions related to account balances at period end (RECV)
rights and obligations existence completeness valuation and allocation
the focal pint for reviewing the work of subordinates and for quality control reviewers are the ______________ ______________
working papers
given the following, calculate the return on equity net sales: 679,600 gross profit: 297,000 interest expense: 1,320 net income: 27,865 total assets: 357,250 total debt: 123,090 total stockholders' equity: 234,160
11.90% 27,865/234,160 = 11.90%
the most commonly used analytical procedure is most likely
comparison of current-year financial information with comparable prior periods
given the following, calculate the return on assets net sales: 679,600 gross profit: 297,000 interest expense: 1,320 net income: 27,865 total assets: 357,250 total debt: 123,090 total stockholders' equity: 234,160
27,865/357,250 = 7.80%
given the following, calculate the operating cash flow ratio cash flow from operations: 32,760 cash flow from investing activities: (196,000) cash flow from financing activities: 200,000 cash: 52,540 a/r: 28,625 inventory: 138,900 prepaid insurance: 26,000 current liabilities: 114,450
32,760/114,450 = .29
given the following, calculate the profit margin net sales: 679,600 gross profit: 297,000 interest expense: 1,320 net income: 27,865 total assets: 357,250 total debt: 123,090 total stockholders' equity: 234,160
4.10% 27,865/679,600 = 4.10%
a company generated total sales of 1,500,000 and has a/r of 14,550. if 85% of sales are made on credit, the days outstanding in a/r is
4.17 days 1,500,000x85%=1,275,000/14,550=87.6 receivables turnover 365/87.6= 4.17 days
These provide a diagrammatic representation of the entity's accounting system
Flowcharts
requests that customers respond only when they disagree with the amount due to the client.
A negative confirmation
requests that customers indicate whether they agree with the amount due to the client stated in the confirmation.
A positive accounts receivable confirmation
under current auditing standards, management assertions fall into which of the following categories?
Assertions about classes of transactions and events for the period audited Assertions about account balances at the period end Assertions about presentation and disclosure
Which of the following statements about internal control is correct? A. A properly maintained internal control system reasonably ensures that collusion among employees cannot occur. B. The cost-benefit relationship is a primary criterion that should be considered in designing an internal control system. C. An exceptionally strong internal control system is enough for the auditor to eliminate substantive procedures on a significant account balance. D. The establishment and maintenance of internal control is an important responsibility of the internal auditor.
B. The cost-benefit relationship is a primary criterion that should be considered in designing an internal control system.
After obtaining an understanding of an entity's internal control system, an auditor may set control risk at high for some assertions because he or she
Believes the internal controls are unlikely to be effective.
according to _______ the purpose of its framework is to help management better control the organization and to provide boards of directors an added ability to oversee internal control
COSO
Internal control is a process designed to provide reasonable assurance regarding the achievement of which objective? A. Effectiveness and efficiency of operations. B. Reliability of financial reporting. C. Compliance with applicable laws and regulations. D. All of these are correct
D. All of these are correct
an effective accounting system established methods and records that will
Determine the proper time period in which transactions occurred Describe transactions in sufficient detail to permit proper classification Identify and record all valid transaction
The auditor may decide to follow a substantive strategy for some or all assertions because
Implemented controls are assessed as ineffective Testing the operating effectiveness of the controls would be inefficient Implemented controls do not pertain to the assertion under consideration
Made up of two broad categories referred to as general and application controls
Information processing controls
Managers should periodically check the quality of subordinates' work
Performance reviews
The auditor should consider each of the following factors when using confirmations to test accounts receivable:
The type of confirmation request. Prior experience with the client or similar engagements. The intended respondent.
T/F: An entity's mix of manual and automated controls varies with the nature and complexity of the entity's use of IT
True
T/F: An entity's risk assessment process should consider the possibility of events that threaten the achievement of objectives
True
T/F: auditors need to understand how management considers risks because many types of risk can impact financial statements
True
T/F: lack of management review is one of the primary sources of internal control weakness
True
the activity in a particular account for the period is generally included in the _________ ____________ working papers
account analysis
when management discloses the fair value of stock or bond investments, it is asserting which of the following
accuracy valuation
this assertion address whether all assets, liabilities and equity interests that should have been included as ending balances on the financial statements have been included
completeness
when management asserts that no material disclosures have been omitted from the footnotes and other disclosures accompanying the financial statements, it is making an assertion about
completeness
failure to meet the __________ assertion results in an understatement in the related account, while failure to meet the _________ assertion results in an overstatement in the account
completeness occurrence
in deciding on the nature and extent of the understanding of internal control needed for the audit, the auditor should consider the entity's operations and systems
complexity sophistication
auditors use __________ _______ procedures to obtain an understanding of the entity's internal controls which help the auditor to identify key controls, recognize types of potential misstatements and design test of controls and substantive procedures
risk assessment
T/F: proper segregation of duties is important in preventing errors from processing
True
T/F: the cost of internal controls should not exceed the benefits derived
True
Examinig ________ ___________ and their related accounts allows the auditor to gather evidence by understanding the processing of related transactions through the information system from their origin to their ultimate disposition in the accounting journals and ledgers
business processes
the assertion related to these address whether financial information is appropriately presented and described, and disclosures are clearly expresses
classification understandability
Within an entity, there is always a risk of the fraud of _________ between individuals will destroy the effectiveness of segregation of duties
collusion
when an employee who receives cash receipts from customers conspires with another employee who records those receipts in the customers' records to steal cash from the entity, this is known as?
collusion
explanations for significant differences observed for substantive analytical procedures must be followed up and resolved through
evaluation quantification corroboration
the working papers document the auditor's compliance with auditing standards and particularly compliance with the standards of ______________
fieldwork
output documents from the application that are used as source documents in later processing are called ________ documents
turnaround
this type of report provides assurance on the operating effectiveness of the service organization's controls based on the auditor's test of those controls
type 2 report
assertions about ___________ or __________ address whether assets, liabilities and equity interests in the financial statements are at appropriate amounts and any resulting adjustments are appropriately recorded
valuation allocation
first selecting a source document and then following it into the journal or ledger is referred to as ________________
tracing
data capture controls must ensure that
transactions are only recorded once all transactions are recorded in the application system rejected transactions are identified, controlled, corrected and reentered
comparing current year financial statements with budgeted amounts is usually performed using ________ analysis
trend
in general, _________ analysis is the least precise method to form an expectation while ______ analysis is the most precise
trend reasonableness
the working __________ ___________ links the amounts if the financial statements to the audit working papers
trial balance
T/F: auditors are mainly concerned that program changes are properly authorized, tested and implemented
true
T/F: errors can be identified at any point in the system
true
T/F: errors must be corrected and resubmitted at the correct point in processing
true
T/F: good documentation is an important component of managing controls
true
Monitoring is a major component of the COSO Internal Control—Integrated Framework. Which of the following is not correct in how the company can implement the monitoring component? A. The independent auditor can serve as part of the entity's control environment and continuous monitoring. B. Monitoring and other audit work conducted by internal audit staff can reduce external audit costs. C. Monitoring can be conducted as a separate evaluation. D. Monitoring can be an ongoing process.
A. The independent auditor can serve as part of the entity's control environment and continuous monitoring.
Which of the following audit techniques would most likely provide an auditor with the most assurance about the effectiveness of the operation of a control? A. Walkthrough. B. Inquiry of entity personnel. C. Reperformance of the control by the auditor. D. Observation of entity personnel.
C. Reperformance of the control by the auditor.
According to COSO, a system of internal controls is designed to provide reasonable assurance about the achievement of entity objectives in which of the following categories?
Compliance with applicable laws and regulations Reliability, timeliness and transparency of internal and external financial and non-financial reporting Effectiveness and efficiency of operations
Assessing control risk below high involves all of the following except A. analyzing the achieved level of control risk after performing tests of controls. B. performing tests of controls. C. identifying specific controls to rely on. D. concluding that controls are ineffective.
D. concluding that controls are ineffective.
T/F: Monitoring is an effective component of internal control, whether or not deficiencies are communicated to those with oversight responsibilities in a timely manner
False
What should be used when it is necessary to show the movement of a document or report back to a previous function?
On-page connector
An effective system of internal controls allows management to focus on which of the following while maintaining compliance with relevant laws and minimizing surprises?
Operations Financial performance goals
In order to set control risk below a high level, the auditor must:
Perform test of the identified controls Identify specific controls that will be relied upon Conclude on the achieved level of control risk
Periodic counting and comparison with amounts shown on control records
Physical controls
This strategy means that the auditor intends to depend on the entity's controls and that the auditor may need a more detailed understanding of internal controls to develop a preliminary or "planned" assessment of control risk
Reliance strategy
Separating the custody of assets, authorization of transactions and recording of transactions
Segregation of duties
these controls are concerned with the physical protection of computer equipment, software and data as well as loss of assets and information through theft or unauthorized use
access and security controls
An auditor's primary consideration regarding an entity's internal controls is whether they
affect the financial statement assertions
PCAOB standards require that audit documentation contain
all documents that form the basis of the audit
this consists of evaluations of financial information through the examination of plausible relationships among both financial and non-financial data
analytical procedures
___________ controls are part of the computer programs used in the accounting system
application
data capture, data validation, processing, output and errors controls are all categories of ________
application
ensuring the completeness and accuracy of transaction processing, authorization, and validity is the goal of ________ controls
application
These apply to the processing of individual applications and help ensure the occurrence, completeness and accuracy of transaction processing
application controls
these apply to the processing of individual applications and help ensure the occurrence, completeness and accuracy of transaction processing
application controls
this return on equity ratio is similar to return on ________ ratio except that is shows only the return provided by the resources contributed by the _______
assets stockholders
confirmation
audit evidence that is a direct written response from a third party (the confirming party) to the auditor, in paper form or by electronic or other medium
the document that outlines the auditor's understanding of the entity and potential risks as well as the strategy to be followed by the auditor is the ____________ ______________
audit plan
the audit procedures that will be conducted by the auditor are contained in the __________ _________
audit programs
the _________ assertion relates to whether all transactions have been properly approved
auhtorization
If properly designed, these type of controls should operate more consistently and are not typically subject to human errors or mistakes in its application
automated controls
using industry information as a basis of comparison can serve as a(n) __________ for assessing how well the entity's financial position and performance compare with others in the industry
benchmark
increase control risk and lower detection risks we might
change the nature of the substantive test from less effective to more effective procedure change the timing of substantive test from interim to year-end change the extent of substantive test by examining more items
management assertion that ordinary maintenance costs to repair tangible assets are charged to the repairs and maintenance expense account rather than being capitalized, is an example of the ________ assertion
classification
The ___________ assertion relates to whether all transactions and events that occurred during the period have been recorded
completeness
components of internal control (CRIME)
control risk information monitoring environment
these are the policies and procedures that help ensure that management's directives are carried out and implemented to address risks identified in the risk assessment process
control activities
This exists in internal controls when the design or operation of a control does not allow management or employees to prevent, detect or correct misstatements on a timely basis
control deficiency
The ___________ ___________ sets the tone of an organization and establishes the foundation for implementing the entity's system of internal control
control environment
This principle includes assignment of authority and responsibility for operating activities and establishment of reporting relationships and authorization hierarchies
control environment
starting with tests of ________ is generally more effective and efficient than starting with tests of ____________
controls details
examination of supporting evidence, inquiries of independent persons and evaluating evidence obtained from other auditing procedures are all common _____________ procedures
corroborating
these controls include rotation of duties and mandatory vacations and control computer operations, data preparation and work flow control
data center and network controls
these controls can be applied at various stages and are mainly concerned with the accuracy assertion
data validation controls
An effective accounting system establishes methods and records that will
describe transactions in sufficient detail to permit proper classification determine the proper time period in which transactions occurred identify and record all valid transaction
The __________ of testing between the accounting records and source documents is important when testing the occurrence and completeness assertions
direction
Identify the components of internal controls as defined by the COSO Framework
entity's risk assessment information and communication monitoring activities control environment
a management statement that the inventory shown on the balance sheet was available for sale at the balance sheet date is an example of the ________ assertion
existence
inbound receipt of relevant information and providing internal control related information to parties outside the organization in response to requirements and expectation is enabled by ___________ communication
external
how management identifies risks relevant to the preparation of financial statements, estimates their significance, assesses the likelihood of their occurrence and decides on how to manage them is most directly relevant to the
external auditors
T/F: if the amount of difference between the auditor's expectation and the recorded amount exceeds the auditor's tolerable difference, the auditor accepts the account
false
T/F: inspecting tangible assets provides assurance for the rights and obligations assertion
false
T/F: the auditor is required to obtain corroborative evidence for planned analytical procedures
false
audit documentation is the property of the
independent auditors
five factors that affect the reliability of evidence
independent source outside the entity effectiveness of internal controls auditor's direct personal knowledge documentary evidence original documents
the process of ________ and _________________-_____________ provides a trail from the financial statements to the individual audit documents that a reviewer can easily follow
indexing cross-referencing
in order to evaluate profitability ratios, each should be interpreted by comparison to ___________ data
industry
Identify factors that can impact the effectiveness of the board of directors or audit committee
information availability experience of members nature and extent of interactions with auditors
The infrastructure, software, people, procedures and data used to support the functioning of internal control is known as a(n) ___________ __________
information system
in many entity;s, this produces much of the knowledge used in monitoring
information system
symbols used in flowcharts are divided into
input/output symbols processing symbols data flow and storage symbols
seeking information or knowledgeable persons within the entity or outside the entity is the basis of _____________
inquiry
this is an important audit procedure that is used extensively throughout the audit and is often complementary to performing other audit procedures
inquiry
auditors usually use the term _________ to refer to unwritten questions asked of the entity's personnel or of a third party, and the term __________ to refer to written requests for a written response from a third party
inquiry confirmation
types of evidence that might be gathered during the application of risk assessment procedures, tests of controls or substantive procedures?
inquiry observation scanning confirmation
examining internal or external records or documents that are in paper form, electronic form or other media is known as ______________
inspection
counting cash on hand and examining inventory are examples of ______ of ________ assets
inspection tangible
on most audit engagements, this makes up the bulk of the evidence gathered by the auditor
inspection of records or documents
processes that are generally considered highly reliable because the auditor has direct knowledge about them
inspection of tangible assets reperformance of tangible assets recalculation of tangible assets
when audit risk is low and the risk of material misstatement is high, detection risk will be set at
low
If the auditor determines that internal controls are properly designed and implemented and the auditor intends to rely on those controls, the auditor will
make an assessment of control risk based on the result of tests of controls perform tests of controls to obtain audit evidence that controls are operating effectively
Who should specify the competence level for a particular job and translate it into a job description that details the specific knowledge and skills required
management
who has the responsibility to design and maintain a system of internal control that provides reasonable assurance that assets and records are properly safeguarded, and that the entity's information system generates information that is reliable for decision making
management
Which of the following are responsible for establishing mechanisms to communicate and hold individuals accountable for performance of internal control responsibilities across the organization
management board of directors
the auditor should gain sufficient knowledge about the control environment to understand the attitudes, awareness, and actions concerning the control environment of
management board of directors
the understanding of internal control may be documented in a(n) ____________ which is most appropriate when the entity has a simple internal control system
memorandum
the auditor should obtain an understanding of the major types of activities the entity uses to __________ internal controls, including the sources of information related to activities
monitor
intended to assess the quality of internal control performance over time
monitoring of controls
the __________ precise the expectation, the __________ the likelihood that the difference is actually a misstatement
more greater
the heading of all audit documentation should include the
name of the entity title of the working paper entity's year-end date
If an entity's accounting system has control weaknesses that result in a high level of assessed control risk, substantive procedures will probably
not be conducted at interim dates
The highest-quality and most reliable audit evidence that segregation of duties is properly implemented is obtained by
observation by the auditor of the employees performing control activities.
To obtain an understanding of an entity's internal controls auditors may use
observation of entity activities and operations inspection of entity documents and reports inquiry of appropriate personnel
The _________ assertion is relevant for revenue transactions because the entity's personnel might have incentives to record fictitious transactions
occurrence
data capture controls are concerned primarily with which of the following assertions
occurrence accuracy completeness
assertions about classes of transactions and events during the period under audit (OAC)
occurrence authorization accuracy completeness cutoff classification
when management presents capitalized lease transactions on the balance sheet as leased assets, the related liabilities as long-term debt and the related footnote, it is asserting
occurrence, rights and obligations
Test of controls directed toward ____________ _____________ are concerned with assessing how the control was applied, the consistency with which it was applied during the audit period and by whom it was applied
operating effectiveness
the main concern of these controls is that computer reports, checks, documents or other printed or displayed information may be distributed or displayed to unauthorized users
output controls
most public accounting firms maintain ____ files containing historical data about the entity that are of continuing relevant to the audit and ___________ files that include information and data specifically related to the year's audit
permanent current
Authorization requirements for access to computer programs and periodic counting and comparison with amounts shown on control records are examples of
physical controls
the primary concern of __________ is simply whether the relationship used to test the assertion makes sense
plausibility
Many organizations prepare ___________ which include documentation of the accounting system and related control activities
procedures manuals
these controls ensure proper execution of transactions
processing controls
the entity;s success or failure for a given period is measured by ________ ratios
profitability
the functions of audit documentation are to
provide the basis for the review of the quality of work aid in the planning, performance and supervision of the audit provide principle support that the audit was conducted in accordance with GAAS
internal control ____________ provides a systematic way for the auditor to investigate the area and is generally used for entities with a relatively complex internal control structure
questionnaires
this ratio includes only assets that are most readily convertible to cash and provides a picture of the entity's liquidity position
quick ratio
Information that is capable of making a difference in user decisions has the characteristic of _____________
relevance
information that is capable of making a difference in user decisions has the characteristic of _____________
relevance
the ________ of audit evidence refers to its relationship to the assertion being tested
relevance
the two fundamental qualitative characteristics for external financial reporting are
relevance faithful representation
appropriateness depends on
relevance reliableness
evidence is considered appropriate when it provides information that is
relevant reliable
the ability to develop precise expectations is influenced by the ___________ of the available data
reliability
whether a particular type of evidence can be depended upon to signal the true state of an assertion is the __________ of evidence
reliability
The controls that are of most direct relevance to a financial statement audit are those that contribute to financial statement
reliability transparency timeliness
When an auditor decides to follow a(n) ______________ strategy, that auditor has to understand the control activities that relate to assertions for which a lower level of control risk is expected
reliance
this involves the independent execution by the auditor of procedures or controls that were originally performed by company personnel
reperformance
a system of internal controls consists of the policies and procedures designed to provide reasonable assurance regarding the achievement of the company's objectives in the following categories:
reporting operations compliance
Which of the following communicate policies and procedures to the entity's personnel
reporting manuals accounting manuals policy manuals
setting and audit strategy
requires a detailed understanding of the entity's internal controls
this ratio indicated the return earned on the resources invested by both the stockholders and the creditors
return on assets
assertions about ________ and _________ address whether the entity owns or controls the assets included on the financial statements, and that liabilities are debt of the entity
rights obligations
As it relates to the external financial reporting objective, the entity's ____________ ____________ process should consider internal and external events and circumstances that may arise and adversely affect the entity's ability to initiate, authorize, record, process and report financial data consistent with management's financial statement assertions
risk assessment
used to obtain an understanding of the entity and its environment, including its internal control, to assess the risks of material misstatement at the financial statement and relevant assertion levels
risk assessment procedures
this process includes consideration of possible changes in the internal or external environment because changes can introduce or change risks to the entity's objectives
risk identification process
searching for large and unusual items in the accounting records and reviewing transactions for errors are examples of _____________
scanning
the auditor's exercise of professional judgment to review accounting data to identify significant or unusual items to test is referred to as ____________
scanning
allowing the individual who opens mail and receives cash payments to have access to the accounts receivable subsidiary ledger is a violation of the _____________ ______________ ____________ principles
segregation of duties
If the auditor determines that internal controls are not properly designed or not implemented the auditor will
set the level of control risk at high use substantive procedures to reduce the risk of material misstatement to an acceptable level
Significant deficiencies are matters that come to an auditor's attention that should be communicated to an entity's audit committee because they represent
significant deficiencies in the design or operation of the internal control.
a(n) ________ ______ in internal control is less severe than a material weakness yet important enough to merit attention by those charged with governance
significant deficiency
coverage ratios provide information on the long-term ___________ of the entity
solvency
assume an entity has 2,500 customers. If the audit mails confirmation to the 25 of the largest customers and only 20 respond the auditor must
still gather sufficient evidence on each of the 25 accounts
The last step in the decision process if performing ___________ procedures
substantive
When an auditor decides to follow a(n) _______________ strategy, little work is done on understanding specific control activities
substantive
used to detect material misstatements at the relevant assertion level
substantive procedures
Regardless of the assessed level of control risk, an auditor would perform some
substantive procedures to restrict detection risk for significant transaction classes.
to be persuasive evidence must be both
sufficient and appropriate
This type of flowchart includes processing steps and computer processing
systems flowchart
used to test the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements at the relevant assertion level
test of controls
the overall decision approach used to gather evidence is referred to as the audit _____ ______
testing hierarchy
the overall decision approach used to gather evidence is referred to as the audit __________ __________
testing hierarchy
when a reliance strategy is chosen
tests of controls are used to assess the achieved level of control risk
these people significantly influence the control consciousness of the entity and they must take their fiduciary responsibilities seriously and actively oversee the entity's accounting and reporting policies and procedures
the board of directors the audit committee
when a substantive analytical procedure is used as the principal substantive procedure for a significant financial statement assertion, the auditor should document
the expectation and hot it was developed results of the comparison of the expectation to the recorded amounts any additional auditing procedures performed in response to significant differences identified
notations that are made by the auditor near, or next to, an item or amount on an audit document that are used to document work performed are called ___________ __________
tick marks
the amount of difference that can be accepted will generally always be lower than __________ ___________
tolerable misstatement