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AC2340 Chapter 5
Terms in this set (17)
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.
Evaluations of financial information through analysis of plausible relationships among both financial and nonfinancial data.
Expressed or implied representations by management regarding the recognition, measurement, presentation, and disclosure of information in the financial statements and related disclosures.
Audit documentation (working papers).
The auditor's principal record of the work performed and the basis for the conclusions in the auditor's report. It also facilitates the planning, performance, and supervision of the engagement and provides the basis for the review of the quality of the work by providing the reviewer with written documentation of the evidence supporting the auditor's significant conclusions.
Information used by the auditor in arriving at the conclusions on which the auditor's opinion is based. Audit evidence includes both information contained in the accounting records underlying the financial statements and other information.
Specific acts performed as the auditor gathers evidence to determine if specific audit objectives are being met.
A confirmation represents audit evidence obtained by the auditor as a direct written response to the auditor from a third party (the confirming party) in paper form or by electronic or other media.
Seeking information of knowledgeable persons, both financial and nonfinancial, within the entity or outside the entity.
Inspection of records and documents.
Examination of internal or external records or documents that are in paper form, electronic form, or other media.
Inspection of tangible assets.
Physical examination of the tangible assets.
Watching a process or procedure being performed by others.
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.
The auditor's checking the mathematical accuracy of documents or records either manually or electronically.
Relevance of evidence.
The relevance of audit evidence refers to its relationship to the assertion or to the objective of the control being tested.
Reliability of evidence.
The diagnosticity of evidence—that is, whether the type of evidence can be relied on to signal the true state of the assertion.
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.
The auditor's exercise of professional judgment to review accounting data to identify significant or unusual items to test.
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