Auditing
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Avg score: 32% • Most missed: “Failure to communicate mission and objectives - Inaccurate or out of date assump…”
Auditing
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25 Questions

1. Risk the auditor is willing to take that the audit procedures will fail to find material errors that were not detected by internal control

2. Documentation or Inspection of Records and Documents -Observation -Physical Examination or Inspection of Tangible Assets -Client Inquiry (do not use Independent Inquiry) -Confirmation -Recalculation and Reperformance -Analytical Procedures

3. Process Risk Analysis (internal focus)

4. Control over the organization by individuals external to org(customers - suppliers - board of directors - regulatory agencies - external audits - owners)

5. The susceptibility of the financial statements to material error assuming no internal control

6. Its a systematic and continuous process. Risk management is iterative where control is temporary and depends on current circumstances - not a permanent condition

7. Leadership - integrity - regulatory - technology - financial planning - human resource - operational - information

8. Industry (competitors - potential entrants - substitutes - suppliers - customers) - Macro environmental Forces (Political - Economic - Social - Technological)

9. Strategic Risk Analysis (external focus)

10. Auditors primary concern - most likely source of problems - reflect current conditions of threats - reflect areas where the auditor needs to focus most of auditing efforts

11. Planned Detection Risk - Acceptable Audit Risk - Inherent Risk - Control Risk

12. Risk that the auditor is willing to take that the financial statements are not fairly stated after the quit

13. Organizational Business Models - External Threat Analysis

14. Avoidance (of activities) - Acceptance (inevitable - unavoidable) - Insurance (transferred through assurance or risk sharing) - Reduction (by implementing proactive procedures-internal control)

15. Control Environment - Risk Assessment - Control Activities - Information and Communication - Monitoring

16. Existence/Occurrence - Rights/Obligations - Valuation/Allocation - Completeness - Presentation/Disclosure

17. Failure to communicate mission and objectives - Inaccurate or out of date assumptions - Undue focus on current conditions - Rigid organizational structure - Failure to enforce accountability - Communication breakdowns

18. Markets - Competitors(adv/dis) - Resources - Internal Processes - External Agents - Strategic Partners - low cost or diff - broad or narrow group of consumers

19. Pinpoints problems that show up in financial results - may suggest financial misstatements - may raise concerns about the viability of the company - may indicate a potential threat to the internal control environment - may highlight potential client

20. Process Map(outlines each process) - Internal Threat Analysis(analyze each process) - Process(an organized unit within the company that has to accomplish a goal set by management) - Audit-Sensitive Processes(based on assessment auditor identifies cri

21. Risk Assessment - Response by Management - Information Reliability - Performance Results - Reaction by Management

22. Competitive Environment - Management or Employee Improper or Incompetent Actions - Process Breakdowns Within Organization - Inaccurate Processing of Information

23. Activities performed by senior management including strategic direction and planning and evaluating the overall performance of the organization by providing feedback about potential problems or risks that should be addressed

24. Diagnosticity - objectivity

25. Authorization - Independent Checks on Performance - Separation of Duties - Physical Control of Assets and Records - Adequate Documents and Records

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