Senior Auditor (China) - independent subject foundations cheat sheet

Public audit has distinct mandates and purposes.

Economy, efficiency and effectiveness ask different questions.

Output counts do not establish public outcomes.

Responsibility and allegations require evidence about actual authority and action.

Analytics flags require validation and do not establish guilt by themselves.

Identify the engagement purpose, criteria and responsibilities.

An audit opinion is not an absolute guarantee.

Objectivity and ethics require analysis of actual threats and responsibilities.

Risk assessment links procedures to reasons a material error could arise.

Local legal powers and professional adoption are not inferred from international labels.

Link each procedure to an assertion or criterion.

Tracing and vouching direction can change the question answered.

Existence, ownership, completeness and valuation need distinct evidence.

Sample size does not cure an incomplete or biased population.

A count or walkthrough alone does not prove every reporting assertion.

Documentation connects objective, evidence, judgment and conclusion.

A promised correction does not automatically erase an existing reporting issue.

Misstatement and inability to obtain evidence have different implications.

Key audit matters and opinion modifications are not interchangeable.

Communicate actual scope and limitations without implying unperformed assurance.

Separate demand and supply mechanisms and state model assumptions.

Distinguish purchases, transfers, budgets, outputs and outcomes.

Additional reserves do not guarantee a fixed lending response.

Current national definitions and legal mandates require separate sources.

Define incremental cash flows and the valuation date.

Discount rate, cash-flow timing and risk assumptions must be consistent.

NPV, IRR, payback and accounting return measure different things.

Expected value does not eliminate downside or estimation uncertainty.

Supplied model rates are not current market or tax facts.

Cost of sales includes carriage inwards and excludes carriage outwards

Closing inventory affects both the trading account and the balance sheet

Drawings reduce capital and are never an expense

An increase in the doubtful debts provision is charged to profit and loss

Capital = opening capital + net profit − drawings

Issued capital and actual cash received are different concepts.

Share premium in the supplied par-value model is not sales revenue.

Distinguish equity distributions from interest on liabilities.

Prime cost includes direct materials consumed, direct labour and direct expenses

Cost of production adds production overheads and adjusts for work in progress

Selling and administration costs are not production costs

Inventory is valued at the lower of cost and net realisable value