Características del usuario a las que se adapta

C. accounting records to the supporting evidence.

D. trial balance to the subsidiary ledger.

AACSB: Analytic Learning Objective: 03-04 List and describe the eight general types of audit procedures for gathering evidence.

Source: Original Topic: Audit Procedures for Obtaining Audit Evidence

71. An auditor's purpose in auditing the information contained in the pension footnote most likely is to obtain evidence concerning management's assertion about

A. rights and obligations.

B. existence.

C. presentation and disclosure.

D. valuation. Learning Objective: 03-04 List and describe the eight general types of audit procedures for gathering evidence.

Source: Original Topic: Audit Procedures for Obtaining Audit Evidence

Short Answer Questions

72. For each of the descriptions 1-6, match the correct word or phrase from A-H.

1. F; 2. C; 3. H; 4. A; 5. B; 6. G

AACSB: Analytic AICPA: BB Critical Thinking AICPA: FN Decision Making Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-04 List and describe the eight general types of audit procedures for gathering evidence.

Source: Original Topic: Audit Procedures for Obtaining Audit Evidence

Essay Questions

73. 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: Analytic AICPA: BB Legal AICPA: FN Research Blooms: Remember Difficulty: 2 Medium Learning Objective: 03-03 Define materiality and explain its importance in the audit planning process.

Source: Original Topic: Materiality

74. 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: Analytic AICPA: BB Legal AICPA: FN Research Blooms: Remember Difficulty: 2 Medium Learning Objective: 03-03 Define materiality and explain its importance in the audit planning process.

Source: Original Topic: Materiality

75. What are the characteristics that distinguish computer processing from manual processing?

Characteristics that distinguish computer processing from manual processing include:

a. Computer system transaction trails may exist for only a short time.

b. Computers process similar transactions uniformly.

c. Functions are more concentrated in a computer system.

d. Increased potential for errors and irregularities exist in computer systems.

e. Certain transactions can be initiated or executed automatically in a computer system.

AACSB: Technology AICPA: BB Leveraging Technology AICPA: FN Leveraging Technology Blooms: Remember Difficulty: 2 Medium Learning 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: Original Topic: Planning in a Computerized Environment

76. What are the advantages and limitations derived from using computer-assisted audit techniques (CAATs) packages?

The advantages of computer-assisted audit techniques (CAATs) packages:

a. Original programming is not required.

b. The required programming is easy.

c. Training time to use the programming is short.

The limitations of computer-assisted audit techniques (CAATs) packages:

a. The computer cannot observe and count physical things.

b. The computer cannot examine external and internal documentation.

c. The computer cannot conduct inquiry procedures.

AACSB: Technology AICPA: BB Leveraging Technology AICPA: FN Leveraging Technology Blooms: Remember Difficulty: 2 Medium Learning 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: Original Topic: Planning in a Computerized Environment

77. D. Jackson, CPA, audited Washington Company's financial statements for the year ended December 31, 2007. On November 1, 2008, Washington notified Jackson that it was changing auditors and that Jackson's services were being terminated.

On November 5, 2008, Washington invited Lincoln, CPA, to make a proposal for an engagement to audit its financial statements for the year ended December 31, 2008.

Required:

What procedures concerning Jackson should Lincoln perform before accepting the engagement?

a. Lincoln should explain to Washington the need to make an inquiry of Jackson and should request permission to do so.

b. Lincoln should ask Washington to authorize Jackson to respond fully to Lincoln's inquiries.

c. If Washington refuses to permit Jackson to respond or limits Jackson's response, Lincoln should inquire as to the reasons and consider the implications in deciding whether to accept the engagement.

d. Lincoln should make specific and reasonable inquiries of Jackson regarding matters Lincoln believes will assist in determining whether to accept the engagement, including specific questions regarding.

(1) Facts that might bear on the integrity of management.

(2) Disagreements with management as to accounting principles, audit procedures, or other similarly significant matters.

(3) Communications Jackson made to management about fraud, illegal acts, or internal control recommendations.

(4) Jackson's understanding as to the reasons for the change of auditors.

e. If Lincoln receives a limited response, Lincoln should consider its implications in deciding whether to accept the engagement.

AACSB: Analytic AICPA: BB Critical Thinking AICPA: FN Decision Making Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-04 List and describe the eight general types of audit procedures for gathering evidence.

Source: AICPA adapted Topic: Audit Procedures for Obtaining Audit Evidence

78. Identify the two types of audit plans and indicate the purpose of each.

The two types of audit plans are (1) the internal control program and (2) the substantive audit plan. The internal control program contains the specification of procedures for obtaining an understanding of the entity's business and

environment, including its internal control, and for assessing the inherent risk and the control risk related to the financial account balances. The substantive audit plan contains the specification of substantive tests for gathering direct evidence on the assertions about dollar amounts in the account balances.

AACSB: Analytic AICPA: BB Industry AICPA: FN Decision Making Blooms: Analyze Difficulty: 1 Easy Learning Objective: 03-02 Understand the importance of planning the audit engagement so that it is conducted in accordance with professional standards.

Source: Original Topic: Audit Plan