Group 3 Audit Documentation

Choose the types of Control Activities

• a. Adequate separation of duties

• b. Adequate documents and records

• c. Comprised solely of independent directors

• d. Independent checks on performance

What is the meaning of analytical procedure?

• a. the written basis for the auditor's conclusions that provides the necessary support for the auditor's assertions and representations made in the auditor's report.

• b. the reasonable rests used to gain an understanding of financial statement accounts and relationships.

• c. a comprehensive list of the specific audit procedures that the audit team needs to perform to gather sufficient appropriate evidence on which to base their opinion on the the financial statements.

• d.the chain of evidence provided through coding, cross-references, and documentation connecting account balances and other summary results with the original transaction source documents.

Audit trail is the chain of evidence provided through coding, cross-references, and documentation connecting account balances and other summary results with the original transaction source documents.

• a. True

• b. False

Audit documentation is the person with the final responsibility for the audit, and usually and industry specialist.

• a. True

• b. False

Termination letter is the documentation provided to former clients dealing with the subject of future services, in particular

• a. access to audit documentation by new auditors

• b. select an item of financial information usually from a journal or ledger

• c. reissuance of the auditor's report when require for SEC reporting or comparative financial reporting

• d. fee arrangements for such future services

Are customer orders evaluated for credit approval by someone independent of sales? State the transaction-related audit objectives being fulfilled if the control is in effect.

• Accuracy

• Completeness

• Occurrence

Are online sales automatically recorded in the sales system? List a test of control to test its effectiveness.

• Select a sample of sales recorded in the sales journal and determine if the appropriate individuals approved the corresponding customer order.

• Review online sales system documentation and make inquiries of client personnel to determine that the automatic interface is a part of the system design. Enter a sample of test transactions of online sales to determine if test data is included in the sales journals. Reverse all test data items.

• Inquire of shipping personnel about the process they use to forward shipping documents to accounting and observe the timeliness of when that occurs.

What are the types of audit evidence?

• Reperformance

• Investigation

• Observation

• Inspection

Two determinants of the persuasiveness and of evidence are appropriateness and sufficieny

• TRUE

• FALSE

4 decisions about what evidence to gather and how much to accumulate are:

• What audit procedures to use

• What sample size to select for a given procedures

• What item to evaluate from the audit procedures

• Which item to select from the population