Audit Exam 2

What are the differences between tracing and vouching

Tracing has to do with completeness, whereas vouching has to do with existence

How long are audit documents retained

For public companies, 7 years

Who owns the audit documentation

The auditor

List the common benchmarks of materiality

PBT, Net Assets, Revenue, Net Income

How much is Performance Materiality (PM)

50-75% of MAT

How much is the audit misstatement posting threshold (AMPT)

5% of MAT

Over what threshold do misstatements require an adjustment (considered material)

PM

Can you test the completeness of a population from the population provided by the client

No

What must you do to test completeness

select items from outside the population

What are the 5 components of the COSO framework

Control Environment

Risk Assessment

Control Activities

Information and Communication

Monitoring Activities

When do you test controls

Benefit outweighs the costs

Public company ICOFR Requirement