Financial Statement Audit - Client Acceptance, Audit Planning, Supervision and Monitoring

Question 1

Definition: Materiality for the financial statements as a whole

Answer 1

Planning materiality or overall materiality

Question 2

Identification: Audit risk model

Answer 2

Audit risk = Inherent risk x Control risk x Detection risk

Question 3

Enumeration: Classes of Transactions FS Assertions

Answer 3

C3APO
1. Completeness
2. Cut-off
3. Classification
4. Accuracy
5. Presentation
6. Occurrence

Question 4

Enumeration: Account Balances FS Assertions

Answer 4

C2PARE
1. Completeness
2. Classification
3. Presentation
4. Accuracy and valuation
5. Rights and obligation
6. Existence

Question 5

Enumeration: Audit procedures

Answer 5

1. Risk Assessment Procedures
2. Test of Controls
3. Substantive Test of Details
4. Substantive Analytical Procedures

Question 6

Definition: Sets the scope, timing, and direction of the audit

Answer 6

Overall audit strategy

Question 7

Definition: Sets the expected nature, timing, and extent of the audit

Answer 7

Audit plan