Auditing

What are assurance services in auditing?

Accounting services that improve the quality of information.

What is the main purpose of an audit?

To assure users of financial information about the accuracy and completeness of the information.

List the four primary types of audits.

Compliance, Operational, Financial statement, Information systems (IT) audits.

What is the role of an internal auditor?

Rotational auditor who serves 2-3 years in the organization.

What is information risk?

The chance that information used by decision makers may be inaccurate.

What does GAAS stand for?

Generally Accepted Auditing Standards.

What is the significance of planning in an IT audit?

To gain a thorough understanding of the company’s business and financial reporting systems.

What are the four primary phases of an IT audit?

Planning, Test of controls, Substantive tests, Audit completion/reporting.

What is the purpose of audit evidence?

Proof of the fairness of financial information.

What is the difference between auditing around, through, and with the computer?

Auditing around the computer uses standalone tests, auditing through involves direct examination of system inputs and outputs, and auditing with utilizes computer-assisted techniques.

Define substantive testing.

Tests of accuracy of monetary amounts of transactions and account balances.

What is the purpose of controls testing?

To evaluate whether the controls are performing effectively.

What is an unqualified opinion in an audit report?

An opinion indicating that the financial statements present a true and fair view.

What are the six principles of the PCAOB/AICPA code?

Responsibilities, Public interest, Integrity, Objectivity and independence, Due care, Scope and nature of services.

What does the Sarbanes-Oxley Act primarily address?

It placed restrictions on auditors, prohibiting certain services and requiring audit committees in public companies.

What is professional skepticism?

It’s the attitude that auditors should maintain by questioning the honesty of their clients and thoroughly evaluating evidence for possible misstatements.