Recap D2 - Staff 2

“A tendency to overestimate one's own ability to make accurate assessments of risk or other judgments or decisions.”

• Overconfidence bias
• Anchoring bias
• Availability bias

“A tendency to place more weight on events or experiences that immediately come to mind or are readily available than on those that are not.”

• Overconfidence bias
• Confirmation bias
• Availability bias

We select one transaction and trace it along its critical path:

• Every year, for non-PIE (public interest entities) recurring audits
• Every three year, for PIE recurring audits
• For non-PIE (public interest entities) recurring audits, when pervasive changes are identified

Can we carry forward prior period documentation of walk-through procedures?

• Yes, for non-PIE (public interest entities) recurring audits
• Yes, for non-PIE (public interest entities) recurring audits when no change identified from probing inquiries
• No, we should refresh our documentation every year

We perform probing inquiries for every audit:

• True
• False

What is overarching IT risk?

• IT applications are processing wrong data
• IT applications are insecure

Which of the following automated techniques can assist teams when identifying SCOTs during the planning stages of the audit?

• Cash anchor testing
• Process map

What is WCGWs?

• The susceptibility of an assertion about a class of transactions, account balance or disclosure to a misstatement that could be material before consideration of any related controls
• The risk that a material misstatement can occur and not be prevented, or detected and corrected, on a timely basis by the entity's internal control
• The risk that a material misstatement has occurred and has not been detected and corrected
• The risk that we identify as we understand the entity that have a likelihood of occurrence of misstatement and a magnitude that could result in a material misstatement without regard to controls

Form “235-C Obtain an understanding of the manage security settings IT process for fully substantive audits” required when:

• The entity uses IT applications in its SCOTs or FSCP that are updated by vendor-supplied changes
• The operation of programs in an IT application are scheduled and monitored by the IT department
• One or more of the IT environment components relevant to the audit is secured by settings (including passwords)
• Users (including privileged users) have access to one or more of the IT environment components

What is not included in critical path when understand the phases of SCOTs?

• Initiation
• Recording
• Processing
• Closing