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  /Subject (Audit 3 exam Cheat Sheet)
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    \vspace{-2pt}\large{\bf{\textcolor{DarkBackground}{\textrm{Audit 3 exam Cheat Sheet}}}} \\
    \normalsize{by \textcolor{DarkBackground}{nova-cane98} via \textcolor{DarkBackground}{\uline{cheatography.com/217313/cs/47883/}}}
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  \mymulticolumn{2}{p{5.377cm}}{\bf\textcolor{white}{Cheatographer}}  \\
  \vspace{-2pt}nova-cane98 \\
  \uline{cheatography.com/nova-cane98} \\
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  \mymulticolumn{1}{p{5.377cm}}{\bf\textcolor{white}{Cheat Sheet}}  \\
   \vspace{-2pt}Not Yet Published.\\
   Updated 14th May, 2026.\\
   Page {\thepage} of \pageref{LastPage}.
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  Measure your website readability!\\
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\begin{tabularx}{8.4cm}{x{2.08 cm} x{5.92 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Assurance {\bf{BROADEST}}}}  \tn
% Row 0
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Assurance Def: & are {\bf{independent}} professional services \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
 & that {\bf{improve}} the quality of information \tn 
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% Row 2
\SetRowColor{LightBackground}
 & or its {\bf{context}} \tn 
% Row Count 5 (+ 1)
% Row 3
\SetRowColor{white}
 & for {\bf{decision makers}} \tn 
% Row Count 6 (+ 1)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{assurance services:\{\{bt=3\}\}} \tn 
% Row Count 7 (+ 1)
% Row 5
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 & quality of a business process \tn 
% Row Count 8 (+ 1)
% Row 6
\SetRowColor{LightBackground}
 & reliability of computer systems \tn 
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% Row 7
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 & (ICFR)  Internal control over financial reporting \tn 
% Row Count 12 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{"Reliability" \{\{fa-ban\}\}  AICPA's definition for Assurance services}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}--}
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\begin{tabularx}{8.4cm}{x{2.64 cm} x{5.36 cm} }
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Attestation {\bf{MIDDLE}}}}  \tn
% Row 0
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Definition & in which a practitioner {\bf{issues a report}} on {\bf{subject matter or assertion}} that is the responsibility of {\bf{another party}} \tn 
% Row Count 6 (+ 6)
% Row 1
\SetRowColor{white}
 & To provide assurance through a written report regarding reliability of management's assertion. \tn 
% Row Count 10 (+ 4)
% Row 2
\SetRowColor{LightBackground}
Examination = & high assurance \tn 
% Row Count 12 (+ 2)
% Row 3
\SetRowColor{white}
Review = & moderate assurance \tn 
% Row Count 13 (+ 1)
% Row 4
\SetRowColor{LightBackground}
nonissuers\{\{bt=3\}\} & \{\{bt=3\}\}AICPA:  SSAE / AT-C standards \tn 
% Row Count 15 (+ 2)
% Row 5
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issuers & PCAOB: AT No.1 \& 2 , \&\& Interim Standards \{\{fa-arrow-up\}\} \tn 
% Row Count 18 (+ 3)
% Row 6
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\mymulticolumn{2}{x{8.4cm}}{financial attestation engagements \{\{bt=3\}\}} \tn 
% Row Count 19 (+ 1)
% Row 7
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 & Agreed upon procedures \tn 
% Row Count 20 (+ 1)
% Row 8
\SetRowColor{LightBackground}
 & Pro forma financial information \tn 
% Row Count 22 (+ 2)
% Row 9
\SetRowColor{white}
 & Financial forecasts and projections \tn 
% Row Count 24 (+ 2)
% Row 10
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\mymulticolumn{2}{x{8.4cm}}{non-financial attestation engagements} \tn 
% Row Count 25 (+ 1)
% Row 11
\SetRowColor{white}
 & Compliance with contractual requirements \tn 
% Row Count 27 (+ 2)
% Row 12
\SetRowColor{LightBackground}
 & Effectiveness of internal control systems \tn 
% Row Count 29 (+ 2)
% Row 13
\SetRowColor{white}
 & Inventory quantities and locations \tn 
% Row Count 31 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{General Audit Info}}  \tn
% Row 0
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\mymulticolumn{2}{x{8.4cm}}{Steps \{\{ac\}\} \{\{bt=3\}\}} \tn 
% Row Count 1 (+ 1)
% Row 1
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1. & Assessing client acceptance and retention decisions \tn 
% Row Count 4 (+ 3)
% Row 2
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2. & Understanding the client-planning \tn 
% Row Count 6 (+ 2)
% Row 3
\SetRowColor{white}
3. & Obtain evidence about internal control and       determine impact on the financial statements \tn 
% Row Count 11 (+ 5)
% Row 4
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4. & Obtain substantive evidence about account assertions \tn 
% Row Count 14 (+ 3)
% Row 5
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5. & Wrapping up the audit and making reporting decisions-do we have enough evidence \tn 
% Row Count 18 (+ 4)
% Row 6
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\mymulticolumn{2}{x{8.4cm}}{WHY?\{\{ac\}\} \{\{bt=3\}\}} \tn 
% Row Count 19 (+ 1)
% Row 7
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User demands: & reliable, relevant, timely info \tn 
% Row Count 21 (+ 2)
% Row 8
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conditions that increase user demand: & Complexity, Remoteness, Time sensitivity, Consequences \tn 
% Row Count 24 (+ 3)
% Row 9
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\mymulticolumn{2}{x{8.4cm}}{AAA Definition \{\{ac\}\} \{\{bt=3\}\}} \tn 
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% Row 10
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\mymulticolumn{2}{x{8.4cm}}{\{\{ac\}\} Auditing is a systematic process of objectively obtaining and evaluating evidence regarding {\bf{assertions}} about economic actions and events to ascertain the degree of correspondence between the assertions and {\bf{established criteria}} and {\bf{communicating}} the results to {\bf{interested users}}.} \tn 
% Row Count 31 (+ 6)
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{General Audit Info (cont)}}  \tn
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{\bf{assertions}} \{\{fa-arrow-right\}\} & Financial Statements \& footnotes \tn 
% Row Count 2 (+ 2)
% Row 12
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{\bf{established criteria}} \{\{fa-arrow-right\}\} & GAAP \tn 
% Row Count 5 (+ 3)
% Row 13
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{\bf{communicating the results}}  \{\{fa-arrow-right\}\} & Auditor's Report/ Other Reports \tn 
% Row Count 8 (+ 3)
% Row 14
\SetRowColor{white}
{\bf{interested users}} & Creditors \&\& Investors \tn 
% Row Count 10 (+ 2)
% Row 15
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\mymulticolumn{2}{x{8.4cm}}{Audit Purpose: \{\{bt=3\}\}} \tn 
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% Row 16
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\mymulticolumn{2}{x{8.4cm}}{\{\{ac\}\} {\bf{provide users}} with an {\bf{opinion}} by the auditor on whether the F/S are {\bf{presented fairly}}, in {\bf{all material respects}} in accordance with the {\bf{AFRF}}} \tn 
% Row Count 15 (+ 4)
% Row 17
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\mymulticolumn{2}{x{8.4cm}}{Audit Premise: \{\{bt=3\}\}} \tn 
% Row Count 16 (+ 1)
% Row 18
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\mymulticolumn{2}{x{8.4cm}}{those charged with governance have responsibility for} \tn 
% Row Count 18 (+ 2)
% Row 19
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 & The preparation and presentation of the f/s in accordance with the AFRF \tn 
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% Row 20
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 & IC over financial reporting \tn 
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% Row 21
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 & Providing auditor with ALL information necessary and unrestricted access. \tn 
% Row Count 28 (+ 4)
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\mymulticolumn{2}{x{8.4cm}}{{\bf{Information risk}} is the risk (probability) that the information (mainly financial) disseminated by a company will be materially false or misleading.}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}--}
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Nature of the Company}}  \tn
% Row 0
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\mymulticolumn{2}{x{8.4cm}}{\{\{fa-circle\}\} The company's organizational structure and management personnel.} \tn 
% Row Count 2 (+ 2)
% Row 1
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\mymulticolumn{2}{x{8.4cm}}{\{\{fa-circle\}\} The sources of funding of the company's operations and investment activities.} \tn 
% Row Count 4 (+ 2)
% Row 2
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\mymulticolumn{2}{x{8.4cm}}{\{\{fa-circle\}\} The company's significant investments} \tn 
% Row Count 6 (+ 2)
% Row 3
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\mymulticolumn{2}{x{8.4cm}}{\{\{fa-circle\}\} The company's operating characteristics, including its size and complexity.} \tn 
% Row Count 8 (+ 2)
% Row 4
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\mymulticolumn{2}{x{8.4cm}}{\{\{fa-circle\}\} The sources of the company's earnings, including the relative profitability of key products and services, and key supplier and customer relationships.} \tn 
% Row Count 12 (+ 4)
% Row 5
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\mymulticolumn{2}{x{8.4cm}}{\{\{bt=1\}\}} \tn 
% Row Count 13 (+ 1)
% Row 6
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\mymulticolumn{2}{x{8.4cm}}{\{\{ac\}\} Where are the Risks of Material Misstatement} \tn 
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\hhline{>{\arrayrulecolor{DarkBackground}}--}
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{{\bf{Preliminary}} Analytical Procedures}}  \tn
% Row 0
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beginning of an audit & compare to industry and previous years \tn 
% Row Count 2 (+ 2)
% Row 1
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\mymulticolumn{2}{x{8.4cm}}{"reasonableness tests" \{\{ac\}\}} \tn 
% Row Count 3 (+ 1)
% Row 2
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\mymulticolumn{2}{x{8.4cm}}{1)Develop an expectation} \tn 
% Row Count 4 (+ 1)
% Row 3
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2) Define a significant difference. & \% OR \$ \tn 
% Row Count 6 (+ 2)
% Row 4
\SetRowColor{LightBackground}
3) Compare expectation with the recorded amount. & horizontal analysis // year to year \tn 
% Row Count 9 (+ 3)
% Row 5
\SetRowColor{white}
 & vertical analysis // \% of whole \tn 
% Row Count 11 (+ 2)
% Row 6
\SetRowColor{LightBackground}
4)  Investigate significant differences & "attention directing" \tn 
% Row Count 13 (+ 2)
% Row 7
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{5) Document each of the preceding steps} \tn 
% Row Count 14 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
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\begin{tabularx}{8.4cm}{x{2.48 cm} x{5.52 cm} }
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Stages of Audit  {\emph{"performance"}}}}  \tn
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\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{1. Obtain Engagement\{\{bt=3\}\}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
 & {\bf{(1)}} perform procedures regarding the acceptance or continuance of the audit client relationship \tn 
% Row Count 5 (+ 4)
% Row 2
\SetRowColor{LightBackground}
 & -must {\bf{attempt}} contact w/ predecessor auditor \tn 
% Row Count 7 (+ 2)
% Row 3
\SetRowColor{white}
 & -when issuer changes auditors \{\{fa-arrow-right\}\}Form 8-K \tn 
% Row Count 10 (+ 3)
% Row 4
\SetRowColor{LightBackground}
Generally Include: & Obtaining and reviewing: annual reports,  interim statements,  registration statements,  Form 10-Ks, reports to regulatory agencies \tn 
% Row Count 15 (+ 5)
% Row 5
\SetRowColor{white}
 & criminal background checks of senior managers \tn 
% Row Count 17 (+ 2)
% Row 6
\SetRowColor{LightBackground}
 & Considering the need for specialists \tn 
% Row Count 19 (+ 2)
% Row 7
\SetRowColor{white}
 & Evaluate the firm's independence \tn 
% Row Count 21 (+ 2)
% Row 8
\SetRowColor{LightBackground}
 & Requesting the client's bankers, legal counsel, underwriters, analysts to "spill the tea" \tn 
% Row Count 25 (+ 4)
% Row 9
\SetRowColor{white}
 & Considering if the engagement will involve {\bf{unusual risks}} \tn 
% Row Count 28 (+ 3)
% Row 10
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 & {\bf{(2)}} determine compliance with independence and ethics requirements \tn 
% Row Count 31 (+ 3)
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Stages of Audit  {\emph{"performance"}} (cont)}}  \tn
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 & {\bf{(3)}} reach a contractual understanding with the client for the terms and conditions of the audit engagement \tn 
% Row Count 5 (+ 5)
% Row 12
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 & {\bf{engagement letter}} has: \tn 
% Row Count 6 (+ 1)
% Row 13
\SetRowColor{LightBackground}
 & -objectives of the engagement \tn 
% Row Count 8 (+ 2)
% Row 14
\SetRowColor{white}
 & -management's responsibilities \tn 
% Row Count 10 (+ 2)
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\SetRowColor{LightBackground}
 & -auditors' responsibilities \tn 
% Row Count 12 (+ 2)
% Row 16
\SetRowColor{white}
 & -any limitations \tn 
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% Row 17
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 & {\emph{optional}} = termination letter \tn 
% Row Count 15 (+ 2)
% Row 18
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{2. Engagement Planning\{\{bt=3\}\}} \tn 
% Row Count 16 (+ 1)
% Row 19
\SetRowColor{LightBackground}
 & {\bf{Audit Plan}} \{\{fa-arrow-right\}\} engagement partner \tn 
% Row Count 18 (+ 2)
% Row 20
\SetRowColor{white}
 & develop and document a plan (NTE) to assess RMM \tn 
% Row Count 20 (+ 2)
% Row 21
\SetRowColor{LightBackground}
 & THEN plan the (NTE) control and substantive tests that mitigate these risks to an acceptable level {\bf{(kinda step 3)}} \tn 
% Row Count 25 (+ 5)
% Row 22
\SetRowColor{white}
 & Why audit plan? \tn 
% Row Count 26 (+ 1)
% Row 23
\SetRowColor{LightBackground}
 & -quality control, supervision, (provable) documentation \tn 
% Row Count 29 (+ 3)
% Row 24
\SetRowColor{white}
 & goals of audit planning \tn 
% Row Count 30 (+ 1)
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Stages of Audit  {\emph{"performance"}} (cont)}}  \tn
% Row 25
\SetRowColor{LightBackground}
 & -firm has the requisite staff \tn 
% Row Count 2 (+ 2)
% Row 26
\SetRowColor{white}
 & -determine materiality \tn 
% Row Count 3 (+ 1)
% Row 27
\SetRowColor{LightBackground}
 & -outline the specific audit procedures to lessen RMM \tn 
% Row Count 5 (+ 2)
% Row 28
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{3. Risk Assessment\{\{bt=3\}\}} \tn 
% Row Count 6 (+ 1)
% Row 29
\SetRowColor{LightBackground}
 & -Internal control \tn 
% Row Count 7 (+ 1)
% Row 30
\SetRowColor{white}
 & -risk of material misstatement \tn 
% Row Count 9 (+ 2)
% Row 31
\SetRowColor{LightBackground}
 & -inherent risk and control risk \tn 
% Row Count 11 (+ 2)
% Row 32
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{4. Audit Evidence\{\{bt=3\}\}} \tn 
% Row Count 12 (+ 1)
% Row 33
\SetRowColor{LightBackground}
 & -"sufficient appropriate" \tn 
% Row Count 14 (+ 2)
% Row 34
\SetRowColor{white}
 & -minutes of meetings, confirmations with independent third parties, invoices, analyst reports, and all other information that permits auditors to reach valid, logical conclusions \tn 
% Row Count 21 (+ 7)
% Row 35
\SetRowColor{LightBackground}
 & -Detection risk!! \tn 
% Row Count 22 (+ 1)
% Row 36
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{5. Reporting (reporting principle)\{\{bt=3\}\}} \tn 
% Row Count 23 (+ 1)
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\begin{tabularx}{8.4cm}{x{3.92 cm} x{4.08 cm} }
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Audit procedures for obtaining evidence}}  \tn
% Row 0
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\mymulticolumn{2}{x{8.4cm}}{Why?\{\{bt=3\}\}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
 & 1) understand the client (\& risks) \tn 
% Row Count 3 (+ 2)
% Row 2
\SetRowColor{LightBackground}
 & "risk assessment procedures" \tn 
% Row Count 5 (+ 2)
% Row 3
\SetRowColor{white}
 & 2) to test the operating effectiveness of IC \tn 
% Row Count 8 (+ 3)
% Row 4
\SetRowColor{LightBackground}
 & "tests of controls" \tn 
% Row Count 9 (+ 1)
% Row 5
\SetRowColor{white}
 & 3) produce evidence about management's assertions \tn 
% Row Count 12 (+ 3)
% Row 6
\SetRowColor{LightBackground}
 & evidence for PERCV/ASB assertions \tn 
% Row Count 14 (+ 2)
% Row 7
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Procedures\{\{bt=3\}\}} \tn 
% Row Count 15 (+ 1)
% Row 8
\SetRowColor{LightBackground}
1) Inspection of Records and Documents & {\bf{completeness (T/S), existence (v), occurrence (V)}} \tn 
% Row Count 18 (+ 3)
% Row 9
\SetRowColor{white}
 & {\emph{vouching, tracing, scanning}} \tn 
% Row Count 20 (+ 2)
% Row 10
\SetRowColor{LightBackground}
 & {\emph{hierarchy of evidence}} \tn 
% Row Count 22 (+ 2)
% Row 11
\SetRowColor{white}
2) Inspection of Tangible Assets & {\bf{existence}} \tn 
% Row Count 24 (+ 2)
% Row 12
\SetRowColor{LightBackground}
3) Observation & "test of controls" \tn 
% Row Count 25 (+ 1)
% Row 13
\SetRowColor{white}
 & a general awareness of events in the client's offices \tn 
% Row Count 28 (+ 3)
% Row 14
\SetRowColor{LightBackground}
4) Inquiry & "risk assessment procedures" / documentation \tn 
% Row Count 31 (+ 3)
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\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Audit procedures for obtaining evidence (cont)}}  \tn
% Row 15
\SetRowColor{LightBackground}
 & written representations or management representations \tn 
% Row Count 3 (+ 3)
% Row 16
\SetRowColor{white}
 & "inquiry alone" is never enough \tn 
% Row Count 5 (+ 2)
% Row 17
\SetRowColor{LightBackground}
 & {\emph{early planning stages of the engagement}} \tn 
% Row Count 8 (+ 3)
% Row 18
\SetRowColor{white}
5) Confirmation & {\bf{existence, R/O, Valuation, Cut-off}} depends on the info requested \tn 
% Row Count 12 (+ 4)
% Row 19
\SetRowColor{LightBackground}
Confirmation letters: & \{\{fa-circle\}\} printed on the client's letterhead and signed by a client officer \tn 
% Row Count 17 (+ 5)
% Row 20
\SetRowColor{white}
 & \{\{fa-circle\}\} seek information the recipient can supply \tn 
% Row Count 20 (+ 3)
% Row 21
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\} audit firm should control confirmations \tn 
% Row Count 23 (+ 3)
% Row 22
\SetRowColor{white}
 & \{\{fa-circle\}\}responses  \{\{fa-arrow-right\}\} the audit firm || \{\{fa-ban\}\} client \tn 
% Row Count 27 (+ 4)
% Row 23
\SetRowColor{LightBackground}
6) Recalculation & {\bf{existence \& valuation}} \tn 
% Row Count 29 (+ 2)
% Row 24
\SetRowColor{white}
 & recalculation of computations || "test of controls" \& potential evidence \tn 
% Row Count 33 (+ 4)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{3.92 cm} x{4.08 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Audit procedures for obtaining evidence (cont)}}  \tn
% Row 25
\SetRowColor{LightBackground}
7) Reperformance & any client control procedure \tn 
% Row Count 2 (+ 2)
% Row 26
\SetRowColor{white}
8) Analytical Procedures & REQUIRED during planning \&\& final evaluation \tn 
% Row Count 5 (+ 3)
% Row 27
\SetRowColor{LightBackground}
 & optional: substantive testing phase \tn 
% Row Count 7 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{2.96 cm} x{5.04 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Auditors are REQUIRED to Document}}  \tn
% Row 0
\SetRowColor{LightBackground}
Risk Assessment process & \{\{fa-arrow-right\}\}in the workpapers \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
 & Discussions with engagement personnel. \tn 
% Row Count 4 (+ 2)
% Row 2
\SetRowColor{LightBackground}
 & Procedures to identify and assess risk. \tn 
% Row Count 6 (+ 2)
% Row 3
\SetRowColor{white}
 & Significant decisions during discussion (team brainstorming sessions) \tn 
% Row Count 9 (+ 3)
% Row 4
\SetRowColor{LightBackground}
 & Specific risks identified and audit team responses. \tn 
% Row Count 12 (+ 3)
% Row 5
\SetRowColor{white}
 & Explanation of why improper revenue recognition is not a risk, if so deemed. \tn 
% Row Count 16 (+ 4)
% Row 6
\SetRowColor{LightBackground}
 & Results of audit procedures, particularly procedures regarding management override. \tn 
% Row Count 20 (+ 4)
% Row 7
\SetRowColor{white}
 & Other conditions causing auditors to believe that additional procedures are required. \tn 
% Row Count 24 (+ 4)
% Row 8
\SetRowColor{LightBackground}
 & Communications to management and those charged with governance, such as the audit committee. \tn 
% Row Count 28 (+ 4)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{3.76 cm} x{4.24 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Audit Documentation}}  \tn
% Row 0
\SetRowColor{LightBackground}
PCAOB-AS 1215 "audit documentation": & The written record of the basis for the auditor's conclusions that provides the support for the auditor's representations, whether those representations are contained in the auditor's report or otherwise \tn 
% Row Count 10 (+ 10)
% Row 1
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Permanent Files\{\{bt=3\}\}} \tn 
% Row Count 11 (+ 1)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{"continuing audit significance"} \tn 
% Row Count 12 (+ 1)
% Row 3
\SetRowColor{white}
 & \{\{fa-circle\}\} corporate or association charter, bylaws, or partnership agreement \tn 
% Row Count 16 (+ 4)
% Row 4
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\} continuing contracts such as leases, bond indentures, and royalty agreements \tn 
% Row Count 21 (+ 5)
% Row 5
\SetRowColor{white}
 & \{\{fa-circle\}\}A history of the company, its products, markets, and background. \tn 
% Row Count 25 (+ 4)
% Row 6
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\}minutes of meetings of stockholders and/or directors on matters of lasting interest. \tn 
% Row Count 30 (+ 5)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{3.76 cm} x{4.24 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Audit Documentation (cont)}}  \tn
% Row 7
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\}Continuing schedules of accounts with balances that are carried forward for several years, such as owners' equity, retained earnings, partnership capital, ect. \tn 
% Row Count 9 (+ 9)
% Row 8
\SetRowColor{white}
 & \{\{fa-circle\}\}prior-years' financial statements and audit reports \tn 
% Row Count 13 (+ 4)
% Row 9
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\}Client organization chart. \tn 
% Row Count 15 (+ 2)
% Row 10
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Current Files\{\{bt=3\}\}} \tn 
% Row Count 16 (+ 1)
% Row 11
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{"the year under audit"} \tn 
% Row Count 17 (+ 1)
% Row 12
\SetRowColor{white}
 & planning memorandum = summary of current files \tn 
% Row Count 20 (+ 3)
% Row 13
\SetRowColor{LightBackground}
 & lead schedule =  summary of  accounts in "account group" \tn 
% Row Count 23 (+ 3)
% Row 14
\SetRowColor{white}
 & Indexing = docs get index number \tn 
% Row Count 25 (+ 2)
% Row 15
\SetRowColor{LightBackground}
 & Cross-referencing = basically a Foreign Key \tn 
% Row Count 28 (+ 3)
% Row 16
\SetRowColor{white}
 & Heading =name of the company, the balance-sheet date, and a descriptive title \tn 
% Row Count 32 (+ 4)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{3.76 cm} x{4.24 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Audit Documentation (cont)}}  \tn
% Row 17
\SetRowColor{LightBackground}
 & Signatures and initials =auditor who performs the work and the supervisor who reviews it must sign the audit documentation \tn 
% Row Count 6 (+ 6)
% Row 18
\SetRowColor{white}
 & Dates of audit work = dates of performance and review are recorded \tn 
% Row Count 10 (+ 4)
% Row 19
\SetRowColor{LightBackground}
 & Audit marks (tick marks) and explanations = auditor's shorthand comments about work preformed \tn 
% Row Count 15 (+ 5)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{4 cm} x{4 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Materiality \&}}  \tn
% Row 0
\SetRowColor{LightBackground}
Lower the materiality level if & high complexity + low balance = higher risk \tn 
% Row Count 3 (+ 3)
% Row 1
\SetRowColor{white}
if materiality is lower \{\{fa-arrow-right\}\} & test more \tn 
% Row Count 6 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{RMM and detection risk are inversely related} \tn 
% Row Count 7 (+ 1)
% Row 3
\SetRowColor{white}
IC risk won't change. & Firm sets this. \tn 
% Row Count 9 (+ 2)
% Row 4
\SetRowColor{LightBackground}
control risk goes up & detection risk goes down \tn 
% Row Count 11 (+ 2)
% Row 5
\SetRowColor{white}
we control & Detection risk \tn 
% Row Count 12 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{2.08 cm} x{5.92 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Cycles}}  \tn
% Row 0
\SetRowColor{LightBackground}
Voucher packet & approvals, accounts, and amounts to be recorded \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
 & supporting purchase order \tn 
% Row Count 3 (+ 1)
% Row 2
\SetRowColor{LightBackground}
 & receiving report \tn 
% Row Count 4 (+ 1)
% Row 3
\SetRowColor{white}
 & vendor invoice \tn 
% Row Count 5 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{2.4 cm} x{5.6 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Entities}}  \tn
% Row 0
\SetRowColor{LightBackground}
{\bf{PCAOB}} Public & Public Company Accounting Oversight Board \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
 & ASs-Auditing Standards \tn 
% Row Count 3 (+ 1)
% Row 2
\SetRowColor{LightBackground}
{\bf{AICPA}} Private & American Institute of Certified Public Accountants \tn 
% Row Count 5 (+ 2)
% Row 3
\SetRowColor{white}
 & ASB - Auditing Standards Board \tn 
% Row Count 7 (+ 2)
% Row 4
\SetRowColor{LightBackground}
 & SASs - Statements on Auditing Standards \tn 
% Row Count 9 (+ 2)
% Row 5
\SetRowColor{white}
{\bf{GAO}} Gov. & U.S. Government Accountability Office \tn 
% Row Count 11 (+ 2)
% Row 6
\SetRowColor{LightBackground}
 & The "Yellow Book" - Government Auditing Standards \tn 
% Row Count 13 (+ 2)
% Row 7
\SetRowColor{white}
{\bf{IFAC}} Foreign & International Federation of Accountants \tn 
% Row Count 15 (+ 2)
% Row 8
\SetRowColor{LightBackground}
 & IAASB - International Auditing and Assurance Standards Board \tn 
% Row Count 18 (+ 3)
% Row 9
\SetRowColor{white}
 & ISAs - International Standards on Auditing \tn 
% Row Count 20 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{Domestic AFRF (applicable financial reporting framework)  \{\{fa-arrow-right\}\} GAAP \newline Foreign AFRF (applicable financial reporting framework) \{\{fa-arrow-right\}\} IFRS}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{2.128 cm} x{2.964 cm} x{2.508 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{3}{x{8.4cm}}{\bf\textcolor{white}{Detection risk}}  \tn
% Row 0
\SetRowColor{LightBackground}
\{\{bb=3\}\} & Need for Suff. \& App.\{\{bb=3\}\} & Detection Risk\{\{bb=3\}\} \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
Poor Controls\{\{bb=1\}\} & \{\{fa-arrow-up\}\}\{\{bb=1\}\} & \{\{fa-arrow-down\}\}\{\{bb=1\}\} \tn 
% Row Count 4 (+ 2)
% Row 2
\SetRowColor{LightBackground}
Good Controls & \{\{fa-arrow-down\}\} & \{\{fa-arrow-up\}\} \tn 
% Row Count 6 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}---}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{8.4cm}}{\bf\textcolor{white}{Detection Risk (pic)}}  \tn
\SetRowColor{LightBackground}
\mymulticolumn{1}{p{8.4cm}}{\vspace{1px}\centerline{\includegraphics[width=5.1cm]{/web/www.cheatography.com/public/uploads/nova-cane98_1778691210_DR.png}}} \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{1.672 cm} x{2.964 cm} x{2.964 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{3}{x{8.4cm}}{\bf\textcolor{white}{ASB Assertions}}  \tn
% Row 0
\SetRowColor{LightBackground}
ASB \seqsplit{Assertions} & Evaluates what? & Procedures \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
\seqsplit{Existence} & do assets exist? & assets Inspection of tangible assets \tn 
% Row Count 5 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\seqsplit{Occurrence} & transactions actually occur? & Inspection of records or documents (vouching) \tn 
% Row Count 8 (+ 3)
% Row 3
\SetRowColor{white}
Rights and \seqsplit{obligations} & ownership \& legal \seqsplit{responsibilities} & independent Confirmations \tn 
% Row Count 11 (+ 3)
% Row 4
\SetRowColor{LightBackground}
\seqsplit{Completeness} & financial statements {\emph{(footnotes too)}} complete? & Inspection of records or documents (tracing) \tn 
% Row Count 15 (+ 4)
% Row 5
\SetRowColor{white}
Cutoff & proper period & Inspection of records or documents (tracing or vouching) \tn 
% Row Count 19 (+ 4)
% Row 6
\SetRowColor{LightBackground}
\seqsplit{Valuation} or \seqsplit{allocation} & accounts valued correctly? & Reperformance \tn 
% Row Count 22 (+ 3)
% Row 7
\SetRowColor{white}
\seqsplit{Accuracy} & transactions recorded accurately? & Inspection of records or documents (tracing or vouching) \tn 
% Row Count 26 (+ 4)
% Row 8
\SetRowColor{LightBackground}
\seqsplit{Presentation} & appropriately presented \& clearly described? & Management Inquiry \tn 
% Row Count 29 (+ 3)
% Row 9
\SetRowColor{white}
\seqsplit{Classification} & in the proper accounts? & Analytical procedures \tn 
% Row Count 31 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}---}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{2.08 cm} x{5.92 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{PERCV}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Presentation \& Disclosure}}\{\{bt=3\}\}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
\seqsplit{Presentation} & footnotes \tn 
% Row Count 3 (+ 2)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{} \tn 
% Row Count 3 (+ 0)
% Row 3
\SetRowColor{white}
\seqsplit{Disclosure} & disclose inventory methods \tn 
% Row Count 4 (+ 1)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Existence \&\& Occurrence}}\{\{bt=3\}\}} \tn 
% Row Count 5 (+ 1)
% Row 5
\SetRowColor{white}
Existence & \{\{fa-circle\}\} assets \tn 
% Row Count 6 (+ 1)
% Row 6
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\} inspection of tangible assets \tn 
% Row Count 8 (+ 2)
% Row 7
\SetRowColor{white}
 & \{\{fa-circle\}\} Balance sheet (vouch) \tn 
% Row Count 10 (+ 2)
% Row 8
\SetRowColor{LightBackground}
\seqsplit{Occurrence} & \{\{fa-circle\}\} transactions \tn 
% Row Count 11 (+ 1)
% Row 9
\SetRowColor{white}
 & \{\{fa-circle\}\} push/pull revenue \tn 
% Row Count 13 (+ 2)
% Row 10
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\} income statement \tn 
% Row Count 15 (+ 2)
% Row 11
\SetRowColor{white}
 & Purchase Journal \{\{fa-arrow-right\}\} Receiving Reports \tn 
% Row Count 17 (+ 2)
% Row 12
\SetRowColor{LightBackground}
 & {\emph{Vouching}} \tn 
% Row Count 18 (+ 1)
% Row 13
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Rights \&\& Obligations}}\{\{bt=3\}\}} \tn 
% Row Count 19 (+ 1)
% Row 14
\SetRowColor{LightBackground}
Rights & \{\{fa-circle\}\} Balance sheet \tn 
% Row Count 20 (+ 1)
% Row 15
\SetRowColor{white}
 & \{\{fa-circle\}\} inventory consignment \tn 
% Row Count 22 (+ 2)
% Row 16
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{} \tn 
% Row Count 22 (+ 0)
% Row 17
\SetRowColor{white}
\seqsplit{Obligations} & \{\{fa-circle\}\} Balance sheet \tn 
% Row Count 24 (+ 2)
% Row 18
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\} consignment \tn 
% Row Count 25 (+ 1)
% Row 19
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Completeness}}\{\{bt=3\}\}} \tn 
% Row Count 26 (+ 1)
% Row 20
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\} liabilities and revenue \tn 
% Row Count 28 (+ 2)
% Row 21
\SetRowColor{white}
 & \{\{fa-circle\}\} accrued liabilities \tn 
% Row Count 30 (+ 2)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{2.08 cm} x{5.92 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{PERCV (cont)}}  \tn
% Row 22
\SetRowColor{LightBackground}
 & Receiving Reports \{\{fa-arrow-right\}\} Purchase Journal \tn 
% Row Count 2 (+ 2)
% Row 23
\SetRowColor{white}
 & {\emph{Tracing}} \tn 
% Row Count 3 (+ 1)
% Row 24
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Valuation OR Allocation}}\{\{bt=3\}\}} \tn 
% Row Count 4 (+ 1)
% Row 25
\SetRowColor{white}
Valuation & \{\{fa-circle\}\} credit ratings \tn 
% Row Count 5 (+ 1)
% Row 26
\SetRowColor{LightBackground}
 & \{\{fa-circle\}\} ASC 606 accuracy \tn 
% Row Count 7 (+ 2)
% Row 27
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Allocation} \tn 
% Row Count 8 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{1.064 cm} x{3.268 cm} x{3.268 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{3}{x{8.4cm}}{\bf\textcolor{white}{GAAS "Principles"}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{3}{x{8.4cm}}{{\bf{Responsibilities}}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
 & 1. Competence & education, training, experience \tn 
% Row Count 3 (+ 2)
% Row 2
\SetRowColor{LightBackground}
 & 2. Independence & fact and appearance \tn 
% Row Count 5 (+ 2)
% Row 3
\SetRowColor{white}
 & 3. Due professional care (GAAS) & performance of the audit AND the preparation of the report \tn 
% Row Count 9 (+ 4)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{3}{x{8.4cm}}{} \tn 
% Row Count 9 (+ 0)
% Row 5
\SetRowColor{white}
\mymulticolumn{3}{x{8.4cm}}{{\bf{Performance}}} \tn 
% Row Count 10 (+ 1)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{3}{x{8.4cm}}{\{\{ac\}\} {\emph{To express an {\bf{opinion}}, Obtain {\bf{reasonable assurance}} that financial statements are free of {\bf{material}} misstatement whether due to {\bf{error or fraud}}}}} \tn 
% Row Count 14 (+ 4)
% Row 7
\SetRowColor{white}
\mymulticolumn{3}{x{8.4cm}}{obtain reasonable assurance:} \tn 
% Row Count 15 (+ 1)
% Row 8
\SetRowColor{LightBackground}
 & Planning and supervision &  \tn 
% Row Count 17 (+ 2)
% Row 9
\SetRowColor{white}
 &  & Prepare an audit program \& plan including timing \tn 
% Row Count 20 (+ 3)
% Row 10
\SetRowColor{LightBackground}
 &  & Supervise the audit work \tn 
% Row Count 22 (+ 2)
% Row 11
\SetRowColor{white}
 &  & Obtain knowledge of the client \tn 
% Row Count 24 (+ 2)
% Row 12
\SetRowColor{LightBackground}
 &  & Have a system in place to settle disagreements \tn 
% Row Count 27 (+ 3)
% Row 13
\SetRowColor{white}
 & Determining materiality & Nature, Timing, Extent \tn 
% Row Count 29 (+ 2)
% Row 14
\SetRowColor{LightBackground}
 & Risk assessment & risk of material misstatement \tn 
% Row Count 31 (+ 2)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{1.064 cm} x{3.268 cm} x{3.268 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{3}{x{8.4cm}}{\bf\textcolor{white}{GAAS "Principles" (cont)}}  \tn
% Row 15
\SetRowColor{LightBackground}
 &  & inherent risk and control risk \tn 
% Row Count 2 (+ 2)
% Row 16
\SetRowColor{white}
 & {\emph{based on an understanding:}} &  \tn 
% Row Count 4 (+ 2)
% Row 17
\SetRowColor{LightBackground}
 &  & \{\{fa-circle\}\} the entity \tn 
% Row Count 6 (+ 2)
% Row 18
\SetRowColor{white}
 &  & \{\{fa-circle\}\}operating environment \tn 
% Row Count 8 (+ 2)
% Row 19
\SetRowColor{LightBackground}
 &  & \{\{fa-circle\}\}internal control \tn 
% Row Count 10 (+ 2)
% Row 20
\SetRowColor{white}
 & {\emph{in order to determine the }} & Nature, Timing, Extent \tn 
% Row Count 12 (+ 2)
% Row 21
\SetRowColor{LightBackground}
 & Evidence Gathering & sufficient \& appropriate \tn 
% Row Count 14 (+ 2)
% Row 22
\SetRowColor{white}
 &  & Sufficient \{\{fa-arrow-right\}\} \# \tn 
% Row Count 16 (+ 2)
% Row 23
\SetRowColor{LightBackground}
 &  & Appropriate \{\{fa-arrow-right\}\} quality (R\&R) \tn 
% Row Count 19 (+ 3)
% Row 24
\SetRowColor{white}
 &  & relevance - the assertion being tested \tn 
% Row Count 22 (+ 3)
% Row 25
\SetRowColor{LightBackground}
 &  & Reliability — source and nature of the evidence \tn 
% Row Count 25 (+ 3)
% Row 26
\SetRowColor{white}
 & {\emph{obtained }} & through audit procedures \tn 
% Row Count 27 (+ 2)
% Row 27
\SetRowColor{LightBackground}
 &  & to afford a reasonable basis for an opinion \tn 
% Row Count 30 (+ 3)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{1.064 cm} x{3.268 cm} x{3.268 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{3}{x{8.4cm}}{\bf\textcolor{white}{GAAS "Principles" (cont)}}  \tn
% Row 28
\SetRowColor{LightBackground}
{\bf{Reporting}} & {\emph{conclusion and communication}} &  \tn 
% Row Count 3 (+ 3)
% Row 29
\SetRowColor{white}
 & State whether financial statements follow GAAP & {\bf{Explicit}} The report shall state whether the financial statements are presented in accordance with GAAP \tn 
% Row Count 10 (+ 7)
% Row 30
\SetRowColor{LightBackground}
 & Identify inconsistencies &  \tn 
% Row Count 12 (+ 2)
% Row 31
\SetRowColor{white}
 & Address adequacy of disclosures &  \tn 
% Row Count 14 (+ 2)
% Row 32
\SetRowColor{LightBackground}
 & Express an opinion or explain why none is given &  \tn 
% Row Count 17 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}---}
\SetRowColor{LightBackground}
\mymulticolumn{3}{x{8.4cm}}{appropriate: Relevance \& Reliability \newline Relevance — the assertion being tested \newline Reliability — source and nature of the evidence}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}---}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{2.08 cm} x{5.92 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Fraud}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{What is FRAUD\{\{bt=3\}\}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
 & 1) {\bf{knowingly}} making material misrepresentations of fact \tn 
% Row Count 4 (+ 3)
% Row 2
\SetRowColor{LightBackground}
 & 2) with the {\bf{intent}} of inducing someone to believe the falsehood {\bf{\&\&}} and {\bf{act}} on it \tn 
% Row Count 8 (+ 4)
% Row 3
\SetRowColor{white}
 & 3) causing victim to {\bf{suffer}} a loss or damage \tn 
% Row Count 10 (+ 2)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Types}}\{\{bt=3\}\}} \tn 
% Row Count 11 (+ 1)
% Row 5
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Employee Fraud}} \{\{ac\}\} \{\{bb=1\}\}} \tn 
% Row Count 12 (+ 1)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{"misappropriations of assets"\{\{ac\}\}} \tn 
% Row Count 13 (+ 1)
% Row 7
\SetRowColor{white}
\seqsplit{Embezzlement} & \{\{fa-arrow-right\}\}employees or nonemployees wrongfully taking money or property entrusted to them, by cover-up \tn 
% Row Count 17 (+ 4)
% Row 8
\SetRowColor{LightBackground}
Larceny & \{\{fa-arrow-right\}\}theft of an employer's property that is not entrusted to an employee \tn 
% Row Count 21 (+ 4)
% Row 9
\SetRowColor{white}
\seqsplit{Defalcation} & \{\{fa-arrow-right\}\}Misuse of funds by a fiduciary \tn 
% Row Count 23 (+ 2)
% Row 10
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Management fraud}}\{\{ac\}\} \{\{bb=1\}\}} \tn 
% Row Count 24 (+ 1)
% Row 11
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{"Fraudulent financial reporting"\{\{ac\}\}} \tn 
% Row Count 25 (+ 1)
% Row 12
\SetRowColor{LightBackground}
 & deliberate fraud committed by management that injures investors and creditors through materially misstated information. \tn 
% Row Count 30 (+ 5)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{2.08 cm} x{5.92 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Fraud (cont)}}  \tn
% Row 13
\SetRowColor{LightBackground}
 & (1) overstating revenues and assets \tn 
% Row Count 2 (+ 2)
% Row 14
\SetRowColor{white}
 & (2) understating expenses and liabilities \tn 
% Row Count 4 (+ 2)
% Row 15
\SetRowColor{LightBackground}
 & (3) giving disclosures that are misstated or that omit important information \tn 
% Row Count 7 (+ 3)
% Row 16
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Prevention}}\{\{bt=3\}\}} \tn 
% Row Count 8 (+ 1)
% Row 17
\SetRowColor{LightBackground}
 & Tone at the top \tn 
% Row Count 9 (+ 1)
% Row 18
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Deterrent}} \{\{bt=3\}\}} \tn 
% Row Count 10 (+ 1)
% Row 19
\SetRowColor{LightBackground}
 & Internal Controls \tn 
% Row Count 11 (+ 1)
% Row 20
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Motives}}  \{\{bt=3\}\}} \tn 
% Row Count 12 (+ 1)
% Row 21
\SetRowColor{LightBackground}
\seqsplit{Psychological} & for the hell of it \tn 
% Row Count 14 (+ 2)
% Row 22
\SetRowColor{white}
\seqsplit{Egocentric} & prove they can \tn 
% Row Count 15 (+ 1)
% Row 23
\SetRowColor{LightBackground}
\seqsplit{Ideological} & moral justification \tn 
% Row Count 17 (+ 2)
% Row 24
\SetRowColor{white}
Economic & need for \$\$ \tn 
% Row Count 18 (+ 1)
% Row 25
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Triangle}} \{\{bt=3\}\}} \tn 
% Row Count 19 (+ 1)
% Row 26
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Incentive} \tn 
% Row Count 20 (+ 1)
% Row 27
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{Opportunity} \tn 
% Row Count 21 (+ 1)
% Row 28
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Attitude/Rationalization} \tn 
% Row Count 22 (+ 1)
% Row 29
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{Capability} \tn 
% Row Count 23 (+ 1)
% Row 30
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Susceptibility }} \{\{bt=3\}\}} \tn 
% Row Count 24 (+ 1)
% Row 31
\SetRowColor{LightBackground}
 & Dollar size of the account. \tn 
% Row Count 25 (+ 1)
% Row 32
\SetRowColor{white}
 & Liquidity. \tn 
% Row Count 26 (+ 1)
% Row 33
\SetRowColor{LightBackground}
 & Volume of transactions \tn 
% Row Count 27 (+ 1)
% Row 34
\SetRowColor{white}
 & Complexity of the transactions \tn 
% Row Count 29 (+ 2)
% Row 35
\SetRowColor{LightBackground}
 & Subjective estimates. \tn 
% Row Count 30 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{8.4cm}}{\bf\textcolor{white}{Control Stages}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{8.4cm}}{Custody} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{8.4cm}}{Authorization} \tn 
% Row Count 2 (+ 1)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{8.4cm}}{Recording} \tn 
% Row Count 3 (+ 1)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{8.4cm}}{Reconciliation} \tn 
% Row Count 4 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{3.44 cm} x{4.56 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Confirmations}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Types}}\{\{bb=1\}\}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Positive} \tn 
% Row Count 2 (+ 1)
% Row 2
\SetRowColor{LightBackground}
 & small number of accounts are involved \tn 
% Row Count 4 (+ 2)
% Row 3
\SetRowColor{white}
 & Individual balances are large \tn 
% Row Count 6 (+ 2)
% Row 4
\SetRowColor{LightBackground}
 & large number of errors are anticipated \tn 
% Row Count 8 (+ 2)
% Row 5
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Negative} \tn 
% Row Count 9 (+ 1)
% Row 6
\SetRowColor{LightBackground}
 & a large number of small balances are involved \tn 
% Row Count 12 (+ 3)
% Row 7
\SetRowColor{white}
 & the combined assessed level of inherent and control risk is low \tn 
% Row Count 15 (+ 3)
% Row 8
\SetRowColor{LightBackground}
 & the auditor has no reason to believe that the recipients of the requests are unlikely to give them consideration. \tn 
% Row Count 21 (+ 6)
% Row 9
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{Blank} \tn 
% Row Count 22 (+ 1)
% Row 10
\SetRowColor{LightBackground}
 & should be used if the recipient is likely to return a positive confirmation without verifying the accuracy of the information. \tn 
% Row Count 28 (+ 6)
% Row 11
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{} \tn 
% Row Count 28 (+ 0)
% Row 12
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{considerations}}\{\{bb=1\}\}} \tn 
% Row Count 29 (+ 1)
% Row 13
\SetRowColor{white}
 & positive and blank confirmations \textgreater{} negative non-responses \tn 
% Row Count 32 (+ 3)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{3.44 cm} x{4.56 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Confirmations (cont)}}  \tn
% Row 14
\SetRowColor{LightBackground}
 & Recipients of accounts receivable confirmations might not report understatements \tn 
% Row Count 4 (+ 4)
% Row 15
\SetRowColor{white}
Non-response to Positive/blank & Follow up with 2nd \& 3rd \tn 
% Row Count 6 (+ 2)
% Row 16
\SetRowColor{LightBackground}
 & lower than expected response rate = fictitious customer accounts \tn 
% Row Count 9 (+ 3)
% Row 17
\SetRowColor{white}
Non-response to negative & Alternative procedures are not necessary \tn 
% Row Count 11 (+ 2)
% Row 18
\SetRowColor{LightBackground}
 & Only limited evidence \tn 
% Row Count 12 (+ 1)
% Row 19
\SetRowColor{white}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Assertions}}\{\{bb=1\}\}} \tn 
% Row Count 13 (+ 1)
% Row 20
\SetRowColor{LightBackground}
 & existence \tn 
% Row Count 14 (+ 1)
% Row 21
\SetRowColor{white}
 & occurrence \tn 
% Row Count 15 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{4 cm} x{4 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Inspection of Firms}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Issuers}}\{\{bb=3\}\}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
PCAOB is charged with {\emph{monitoring}} & \{\{fa-arrow-right\}\}{\bf{"inspections"}} \tn 
% Row Count 3 (+ 2)
% Row 2
\SetRowColor{LightBackground}
\textgreater{}100 issuer audits & annual inspections \tn 
% Row Count 4 (+ 1)
% Row 3
\SetRowColor{white}
\textless{}100 issuer audits & triennial inspections \tn 
% Row Count 6 (+ 2)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{2}{x{8.4cm}}{{\bf{Non-Issuers}}\{\{bb=3\}\}} \tn 
% Row Count 7 (+ 1)
% Row 5
\SetRowColor{white}
AICPA & \{\{fa-arrow-right\}\}{\bf{"peer reviews"}} \tn 
% Row Count 9 (+ 2)
% Row 6
\SetRowColor{LightBackground}
AICPA National Peer Review Committee & Triennial peer reviews \tn 
% Row Count 11 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{3.2 cm} x{4.8 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Plans}}  \tn
% Row 0
\SetRowColor{LightBackground}
audit plan & a comprehensive list of the "specific audit procedures" that the audit team needs to perform to gather \{\{fa-exclamation\}\}sufficient\{\{fa-exclamation\}\}appropriate evidence \tn 
% Row Count 8 (+ 8)
% Row 1
\SetRowColor{white}
internal control audit plan & a list of "specific procedures" needed to obtain an understanding of the client's internal control system and test that understanding for those controls \tn 
% Row Count 15 (+ 7)
% Row 2
\SetRowColor{LightBackground}
substantive audit plan & a list of "audit procedures" for gathering evidence \tn 
% Row Count 18 (+ 3)
% Row 3
\SetRowColor{white}
 & (1) substantive analytical procedures \tn 
% Row Count 20 (+ 2)
% Row 4
\SetRowColor{LightBackground}
 & -more efficient \tn 
% Row Count 21 (+ 1)
% Row 5
\SetRowColor{white}
 & (2) tests of details \tn 
% Row Count 22 (+ 1)
% Row 6
\SetRowColor{LightBackground}
 & -more effective \tn 
% Row Count 23 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{4 cm} x{4 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{System of Quality Control //AICPA // Audit firm}}  \tn
% Row 0
\SetRowColor{LightBackground}
quality control standards & QC \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
Purpose\{\{bb=1\}\} & \{\{bb=1\}\} provide the firm reasonable assurance that the firm and its personnel \tn 
% Row Count 6 (+ 4)
% Row 2
\SetRowColor{LightBackground}
1. Leadership responsibilities & "tone at the top" \tn 
% Row Count 8 (+ 2)
% Row 3
\SetRowColor{white}
2. Relevant ethical requirements & independence, Competence, Due professional care, Skepticism \tn 
% Row Count 12 (+ 4)
% Row 4
\SetRowColor{LightBackground}
3. Acceptance and continuance of client relationships & adequately perform the engagement, integrity of the client, firm's ability to comply with legal and ethical requirements \tn 
% Row Count 19 (+ 7)
% Row 5
\SetRowColor{white}
4. Human resources (audit firm) & Hire quality personnel, Assign staff to engagements based on their capabilities, Provide professional development opportunities, Effectively evaluate, compensate, and promote staff \tn 
% Row Count 28 (+ 9)
% Row 6
\SetRowColor{LightBackground}
5. Engagement performance & engagement quality control reviews \tn 
% Row Count 30 (+ 2)
\end{tabularx}
\par\addvspace{1.3em}

\vfill
\columnbreak
\begin{tabularx}{8.4cm}{x{4 cm} x{4 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{System of Quality Control //AICPA // Audit firm (cont)}}  \tn
% Row 7
\SetRowColor{LightBackground}
6. Monitoring. & either an ongoing postissuance review of engagement documentation or targeted inspection procedures for a sample of engagements \tn 
% Row Count 7 (+ 7)
% Row 8
\SetRowColor{white}
 & -appropriateness of the firm's guidance materials \tn 
% Row Count 10 (+ 3)
% Row 9
\SetRowColor{LightBackground}
 & -compliance with policies and procedures on independence \tn 
% Row Count 13 (+ 3)
% Row 10
\SetRowColor{white}
 & - effectiveness of continuing professional education \tn 
% Row Count 16 (+ 3)
% Row 11
\SetRowColor{LightBackground}
 & -decisions regarding the acceptance and continuance \tn 
% Row Count 19 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{8.4cm}}{\bf\textcolor{white}{Balance-Sheet / Operations Ratios}}  \tn
\SetRowColor{LightBackground}
\mymulticolumn{1}{p{8.4cm}}{\vspace{1px}\centerline{\includegraphics[width=5.1cm]{/web/www.cheatography.com/public/uploads/nova-cane98_1778702649_Financial ratios.png}}} \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{8.4cm}}{{\bf{Assessing the Client}}}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{1.596 cm} x{4.408 cm} x{1.596 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{3}{x{8.4cm}}{\bf\textcolor{white}{Directions}}  \tn
% Row 0
\SetRowColor{LightBackground}
Source & \{\{fa-arrow-right\}\} TRACING \{\{fa-arrow-right\}\} & \seqsplit{Accounting} Docs \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
\{\{bb=3\}\} & \{\{bb=3\}\} & \{\{bb=3\}\} \tn 
% Row Count 3 (+ 1)
% Row 2
\SetRowColor{LightBackground}
\seqsplit{Accounting} Docs & \{\{fa-arrow-right\}\} VOUCHING\{\{fa-arrow-right\}\} & Source \tn 
% Row Count 5 (+ 2)
% Row 3
\SetRowColor{white}
\{\{bb=3\}\} & \{\{bb=3\}\} & \{\{bb=3\}\} \tn 
% Row Count 6 (+ 1)
% Row 4
\SetRowColor{LightBackground}
CAATs & \{\{fa-eye\}\}Scanning\{\{fa-eye\}\} & \seqsplit{Accounting} Docs \tn 
% Row Count 8 (+ 2)
% Row 5
\SetRowColor{white}
\{\{bb=3\}\} & \{\{bb=3\}\} & \{\{bb=3\}\} \tn 
% Row Count 9 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}---}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{8.4cm}{x{5.44 cm} x{2.56 cm} }
\SetRowColor{DarkBackground}
\mymulticolumn{2}{x{8.4cm}}{\bf\textcolor{white}{Control Signals}}  \tn
% Row 0
\SetRowColor{LightBackground}
"absence of controls" & inherent risk \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
"internal control effectiveness" & control risk \tn 
% Row Count 4 (+ 2)
% Row 2
\SetRowColor{LightBackground}
"sufficient appropriate evidence" & detection risk \tn 
% Row Count 6 (+ 2)
% Row 3
\SetRowColor{white}
"more internal control" & lower control risk \tn 
% Row Count 8 (+ 2)
% Row 4
\SetRowColor{LightBackground}
"less effective controls" & increase procedures \tn 
% Row Count 10 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}--}
\end{tabularx}
\par\addvspace{1.3em}


% That's all folks
\end{multicols*}

\end{document}