WGU D251 Advanced Auditing Study guides, Class notes & Summaries

Known misstatements are those that the auditor has specifically identified and about which there is no doubt; they are also known as factual misstatements. True Even if immaterial, an intentional misstatement may cause serious difficulties in the audit, and for the client. True The auditor discovers various errors in the client's financial statements during the audit. At the end of the audit, the auditor analyzes these misstatements to determine if the client needs to correct th...

In order for an external auditor to complete an audit of a public company, the entity's management must comply with all of the following except a. accept responsbility for the effectiveness of the entity's internal control financial reporting b. evaluate the effectiveness of the entity's internal control over financial reporting using suitable control criteria c. support its evaluation with sufficient evidence, including documentation d. present an oral assessment of the effectiveness o...

Agreed-Upon Procedures -Agree with client on procedures - Report outcome/findings from procedures (no conclusion, just findings) -Report distribution is limited -No opinion, so NO INDEPENDENCE REQUIREMENTS (yay!) Types of Consulting Engagements Consultations -using existing personal knowledge Advisory services - develop findings, conclusions, and recommendations Implementation services - put action plan into effect Transaction services - specific client transaction Staff support -...

Which phrase or term regarding materiality is used by the Supreme Court of the United States and is not found in the FASB Concepts Statements No. 2? - Probably that the judgment of a reasonable person - Significantly altered the total mix of information available - Magnitude of an omission or misstatement - In light of surrounding circumstances Significantly altered the total mix of information available. Which materiality does an auditor use when determining whether the financial st...

Channel stuffing is a fraud in the revenue cycle that involves recording revenue after a customer has requested to purchase the inventory. False If the contract stipulates more than one deliverable, the client must allocate a separate price to each deliverable. True Under the FASB's guidance on revenue recognition, which of the following is not a criteria that must be met in order for a contract to exist? a. The parties have approved it. b. The auditor has ensured that the...

Which phrase or term regarding materiality is used by the Supreme Court of the United States and is not found in FASB Concepts Statements No. 2 in light of surrounding circumstances significantly altered the total mix of information available magnitude of an omission or misstatement probable that the judgment of a reasonable person significantly altered the total mix of information available Which materiality does an auditor use when determining whether the financial statemen...

What is materiality level that an auditor uses for determining significant accounts, significant locations, and audit procedures for those accounts and locations? a. Planning Materiality b. Overall Materiality c. Posting Materiality d. Performance Materiality d. Performance Materiality An auditor has determined performance materiality has been set too high at the beginning of the audit. Which procedures should this auditor consider to detect misstatements? a. The auditor should ...

Which phrase or term regarding materiality is used by the Supreme Court of the United States and is not found in FASB Concepts Statements No. 2 in light of surrounding circumstances significantly altered the total mix of information available magnitude of an omission or misstatement probable that the judgment of a reasonable person significantly altered the total mix of information available Which materiality does an auditor use when determining whether the financial statemen...

Which phrase or term regarding materiality is used by the Supreme Court of the United States, and is NOT found in FASB Concepts Statements No. 2? Significantly altered the total mix of information available. Which materiality does an auditor use when determining whether the financial statements overall are materially correct? Planning Materiality. Planning= Overall What describes the misstatements identified throughout the audit that will be considered at the end of the audit ...

misstatement An error, either intentional or unintentional, that exists in a transaction or financial statement account balance. alternative procedures Procedures used to obtain evidence about the existence and valuation of accounts receivable when a positive confirmation is not returned, including examining cash collected after the confirmation date and vouching unpaid invoices to customers' orders, sales orders, shipping documents, and sales invoices. Altman Z-scores A series...