Audit - Ch 4 & 5

Examination of internal or external records or documents that are in paper form, electronic form, or other media.

Inspection of records and documents

Physical examination of the tangible assets.

Inspection of tangible assets

The identification, analysis, and management of risks relevant to the preparation of financial statements that are fairly presented in conformity with GAAP.

Risk Assessment

The nature, timing, and extent of audit procedures, where nature refers to the type of evidence; timing refers to when the evidence will be gathered; and extent refers to how much of the type of evidence will be evaluated.

Scope of the audit

The records of initial entries and supporting records, such as checks and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers, journal entries, and other adjustments to the financial statements that are not reflected in formal journal entries; and records such as work sheets and spreadsheets supporting cost allocations, computations, reconciliations, and disclosures.

accounting records

Using analysis, modeling, and visualization to discover and analyze patterns, anomalies, and other information in data in the context of the audit.

audit data analytics

Audit evidence obtained by the auditor as a direct written response to the auditor from a third party in paper form or by electronic or other medium.

confirmation

The risk that material misstatements that could occur in an assertion about an account or disclosure and that could be material, either individually or in combination with other misstatements, will not be prevented, or detected and corrected, on a timely basis by the entity's internal control.

control risk

The risk that the procedures performed by the auditor will not reveal a misstatement that exists and that could be material, either individually or in combination with other misstatements.

detection risk

The relationship of audit evidence to the assertion or to the objective of the control being tested.

relevance of evidence

A risk of material misstatement that is important enough to require special audit consideration.

significant risk

Audit evidence that includes minutes of meetings; confirmations from third parties; industry analysts' reports; comparable data about competitors (benchmarking); controls manuals; information obtained by the auditor from such audit procedures as inquiry, observation, and inspection; and other information developed by, or available to, the auditor that permits the auditor to reach conclusions through valid reasoning.

Other Information