1.F; 2.C; 3.H; 4.A; 5.B; 6.GAACSB: AnalyticAICPA BB: LegalAICPA FN: ResearchBlooms: RememberDifficulty: 2 MediumLearning Objective: 03-02 Understand the importance of planning the audit engagement so that it is conducted in accordance with professional standards.Learning Objective: 03-04 List and describe the eight general types of audit procedures for gathering evidence.Learning Objective: 03-06 Define what is meant by the proper form and content of audit documentation.Source: OriginalTopic: Audit DocumentationTopic: Audit ProceduresTopic: PlanningEssay Questions141.Explain the bottom-up approach and the top-down approach to quantifying overall materiality. In the bottom-up approach to judging materiality, amounts in each account are judged separately and then combined to determine the overall effect. In the top-down approach to judging materiality, an overall material amount is determined for the financial statements and then allocated to each particular account.AACSB: AnalyticAICPA BB: LegalAICPA FN: ResearchBlooms: RememberDifficulty: 2 Medium
Learning Objective: 03-03 Define materiality and explain its importance in the audit planning process.Source: OriginalTopic: Materiality142.Do the following regarding auditors' concepts of overall "materiality" considered at the planning stage (i.e., "planning materiality").a. Define or describe independent auditors' concept of "planning materiality."b. Name (but do not describe or explain) three common relationships or considerations used by auditors when assessing the dollar amount considered to be material. a. Planning materiality is the largest amount of uncorrected dollar misstatement the auditors believe could exist in published financial statements without causing them to be considered materially misleading.b. Absolute size, relative size, nature of the item or issue, circumstances, uncertainty, cumulative effects.AACSB: AnalyticAICPA BB: LegalAICPA FN: ResearchBlooms: RememberDifficulty: 2 MediumLearning Objective: 03-03 Define materiality and explain its importance in the audit planning process.Source: OriginalTopic: Materiality143.What are the characteristics that distinguish computer processing from manual processing? Characteristics that distinguish computer processing from manual processing include:AACSB: TechnologyAICPA BB: Leveraging TechnologyAICPA FN: Leveraging TechnologyBlooms: RememberDifficulty: 2 MediumLearning Objective: 03-05 List and discuss matters of planning that auditors should consider related to the client's computer environment and describe how CAATs can be used to improve the efficiency of the audit process.
Source: OriginalTopic: Information Technology
- Spring '14
- Financial audit, AACSB, AICPA FN, AICPA BB