Recap D5 - Staff 2

Misstatements related to the misapplication of accounting principles or methods is a:

• Factual misstatment
• Projected misstatement
• Judgement misstatement
• It depends

When we identify misstatements, both corrected and uncorrected, we assess their effect on TE, our combined risk assessment (CRA), and our substantive procedures

• A:TE
• B: our combined risk assessment (CRA)
• C: our substantive procedures
• D: A, B, C

We conclude on the aggregate uncorrected misstatements

• before the turnaround effect on the current period’s income
• after the turnaround effect on the current period’s income
• both before and afer the turnaround effect on the current period’s income

We consider the potential for undetected misstatements when evaluating the significance of the …......for the FS as a whole

• A: uncorrected misstatement
• B: currected misstatement
• C: both A and B

UMT is equal to

• Lower end of PM
• PM - TE
• Consultation limit

When the aggregate of detected uncorrected misstatements exceeds the UMT, we consider

• A.Lowering TE
• B. amend our CRAs
• C. perform additional substantive procedures
• D. both A and B

What are responds to risks of material misstatement due to fraud?

• A. design an overall response for risks that are pervasive to the financial statements as a whole
• B. design a pecific response for risks that relate to a particular account, assertion or SCOT
• C. consider the presumptive risks of material misstatement due to fraud
• D. It depends on the nature of fraud
• E. A, B, C

Samples of overall responses: 1. Assign significant audit responsibilities to audit team members with sufficient knowledge, skills and abilities 2. Incorporate an element of unpredictability in the nature, timing and extent of our audit procedures 3. Adapting the extent of our procedures to reflect the identified risks of material misstatement due to fraud 4. Evaluate the selection and application of accounting policies established by the entity to determine whether the accounting policies are being applied in an inappropriate manner

• 1,2,3
• 1,2,4,
• 2.3.4
• 1,3,4

If there have been significant changes to the control environment, relevant SCOT(s) or relevant controls (if applicable) from the date of our interim procedures, or when we identify unexpected misstatements during our interim substantive procedures

• A. we perform additional walkthrough procedures and tests of controls
• B. we design more extensive substantive rollforward procedures
• C. we could not design rollforward procedures
• D. A, B

Unusual items might be based on:

• A. Size/ amount
• B. Trend
• C. Timing
• D. A, B
• E. A, B, C