New Staff 30 Jun 2023 - Day 4

What are key objectives of lesson 7:

1. Prepare a quality audit workpaper

2. Use EY sampling tools effectively

3. Perform substantive testing on additions using audit sampling

4. Discuss the importance of archiving workpapers

5. Perform test of control for PP&E

• 1, 2, 3

• 1, 2, 3, 4

• 1, 2

• 1, 2, 3, 4, 5

Select procedures to collect audit evidence

1. Inquiry

2. Observation

3. Reperformance

4. Inspection

5. Recalculation

6. External confirmation

7. Analytical procedures

• All

• 1 to 6

• 1 to 5

• 1 to 4

EY smart sampling is used for 

1. Select key items

2. Determine representative sample size

3. Automatically select the sample

• 1, 2

• 1, 2, 3

• 2, 3

• 1, 3

Key items are those that have a higher likelihood of misstatement, such as:

Choose the correct answer

• Related party transactions

• Higher value or older items as compared to other items in the population

• A & B

• Both are wrongs

Our tests of details may include:

Choose the correct answer

• Recalculating amounts to verify the mathematical accuracy of documents or records

• Recalculating amounts to verify the mathematical accuracy of documents or records

• A & B

• Both are wrongs

We generally do not identify key items based on a quantitative testing threshold for liability or expense accounts as our primary concern is with their completeness, and not their existence

• TRUE

• FALSE