ACCT 3222 - Wiley - LSU - Ch 9 EXAM WITH CORRECT ANSWERS

ACCT 3222 - Wiley - LSU - Ch 9 EXAM ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




WITH CORRECT ANSWERS ||\\||\\ ||\\||\\




Substantive procedures - correct answers✔✔audit procedures ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




designed to detect material misstatements at the assertion level ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




and to gather evidence to support management assertions
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Some risks impact at the F/S level - correct||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




answers✔✔Management pressure to not violate debt ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




covenants ex. ||\\||\\




Some risks impact at the assertion level - correct
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answers✔✔(transactions/accounts)


Auditor's response to risk impact at the F/S level - correct ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




answers✔✔- Make changes to the NET (nature, extent, timing), ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




as needed ||\\||\\




- More elements of unpredictability
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- More experienced staff on higher risk areas
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- More supervision of audit work
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,Auditor's response to risk impact at the assertion level - correct
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answers✔✔2 categories of procedures: substantive analytical ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




procedures (A) and tests of details (FIVE CROTS) ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




Substantive analytical procedures (A) - correct ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




answers✔✔Trend analysis ||\\||\\




Ratio analysis
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Optional in risk response phase ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




Tests of Details - correct answers✔✔FIVE CROTS
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Footing, cross footing, recalculating
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Inquiry
Vouching
Examination/inspection
Confirmation
Reperformance
Observation
Tracing
Scanning

, NET - correct answers✔✔Nature (What evidence)
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Extent (How much evidence) ||\\||\\ ||\\||\\ ||\\||\\




Timing (When to collect evidence) ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




Assertions about classes of transactions and events - correct
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answers✔✔Typically I/S and CFS accounts ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




1. Occurrence and Cutoff
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2. Completeness and Cutoff
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3. Accuracy and Classification
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Assertions about account balances at year-end - correct
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answers✔✔Typically B/S accounts ||\\||\\ ||\\||\\




1. Existence and Rights and obligations
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2. Completeness
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3. Allocation and valuation
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Assertions about presentation and disclosure - correct
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answers✔✔Disclosures made in the F/S ||\\||\\ ||\\||\\ ||\\||\\ ||\\||\\




1. Occurrence and Rights and obligations
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