4.27
a) Factors that affect the reliability of confirmations:
- The form of the confirmation
- Prior experience with the entity
- The nature of the information being confirmed
- The intended respondent
b) Information on DynaStyle's financial statements that might be verified through the use of information:
- Cash & bank balances - confirm the amount balance from the bank.
4.29
a) Purposes of analytical procedures:
- Preliminary analytical procedures - used to assist the auditor to better understand the business & to design the nature, timing, & extend of audit procedures.
- Substantive analytical procedures - used as a substantive procedure to obtain audit evidence about particular assertions related to account balances @ classes of transactions.
- Final analytical procedures - used as an overall review of the financial information in the final review stage of the audit.
b) Source of information:
- Financial & operating data
- Budgets & forecasts
- Industry publication
- Competitor information
- Management's analysis
- Analyst's report
c) The factors that influence an auditor's consideration of the reliability of data:
- The independence of the source of the evidence
- The effectiveness of internal controls
- The auditor's direct personal knowledge
5.13
2 major types of working paper files:
- Permanent files - historical data about the client that are of continuing relevance to the audit.
- Current files - include information & data related specifically to the current year's engagement.
Examples:
Permanent file
- Chart of account
- Copies of important contract
Current file
- Audit plan & audit program
- Adjusting & reclassification journal entries
5.14
Indexing & cross-referencing important to the documentation of audit working papers because the members of the audit team @ firm can find the relevant audit evidence & it can be linked in audit software. This process of indexing & cross-referencing provides a trail from the financial statements to the individual audit documents that a reviewer can easily follow.
5.36
a) Purposes of working papers:
- to record of audit procedures performed, to obtain the relevant audit evidence, & the conclusions reached by the auditor in the engagement.
b) The various types of audit documents:
- Audit memoranda
- Account analysis & listings
- Working trial balance
c)
Extra questions
