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Unformatted text preview: 4-4 Assertions about account balances at the period end: Assertion Definition Existence Assets, liabilities, and equity interests exist. Rights and The entity holds or controls the rights to assets, and liabilities Obligations are the obligations of the entity. Completeness All assets, liabilities, and equity interests that should have been recorded have been recorded. Valuation and Assets, liabilities, and equity interests are included in the Allocation financial statements at appropriate amounts, and any resulting valuation or allocation adjustments are appropriately recorded. 4-7 The types of audit procedures and their definitions are: (1) Inspection of records or documents consists of examining internal and external records or documents that are in paper form, electronic form, or other media. (2) Inspection of tangible assets consists of physical examination of assets. (3) Observation consists of looking at a process or procedure being performed by others. (4) Inquiry consists of seeking information of knowledgeable persons (both financial and nonfinancial) throughout the entity and outside the entity. (5) Confirmation is the process of obtaining a representation of information or of an existing condition directly from a third party. (6) Recalculation consists of checking the mathematical accuracy of documents and records. (7) Reperformance is 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 CAATs. (8) Analytical procedures consist of evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data (AU 329). (9) Scanning is the review of accounting data to identify significant or unusual items. 4-12 4-13 4-14 4-15 4-16 4-17 4-18 4-19 4-20 4-21 4-23 A. B. C. D. E. F. G. H. I. J. K. B C B D A B B C D A 5 1 7 4 8 2 3 7 5 1/7 9 ...
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- Spring '08
- Balance Sheet, Generally Accepted Accounting Principles, Financial audit