The flashcards below were created by user
acelaker
on FreezingBlue Flashcards.
-
When a CPA firm completes an audit of a nonpublic business and issues a report, does
it express an opinion on the client’s accounting records, financial statements,
or both
Only financial statements. Per GAAS
-
What is a material amount from the perspective of auditors? Give an example of how that
may differ based on the nature of the item
Sufficiently important to influence decisions made by reasonable users of financial statements
Size matter!!
-
What are the duties and responsibilities of the Public Company Accounting Oversight
Board
Registration of public accounting firms that audit public companies
- Conduct inspections of public company practice of registered public
- accounting firms
Establishing ethical and professional standards
-
Which of the following organizations can revoke the right of an individual to practice as a CPA?
The applicable state board of accountancy
-
The AICPA over time has played an important role in standards setting.
Which of the following standards are currently established by the AICPA?
Auditing standards applicable to audits ofnonpublic companies
-
Which of the following does the FASB consider a source of non-authoritative guidance for use when there is no authoritative guidance available?
FASB concepts statements
-
Financial statements audits performed under PCAOB requirements are designed to provide which types of assurance with respect the detection of material misstatements due to errors or fraud?
Reasonable (Yes) Absolute (No)
-
A basic objective of a CPA firm is to provide professional services
that conform with professional standards. Reasonable assurance of achieving
this basic objective is provide through:
A system of quality control
-
Which of the following is not explicitly included in a standard report
for a nonpublic company?
The internal control of the client was satisfactory
-
What is explicitly included in a standard report for a nonpublic company?
The CPA’s opinion that the financial statements comply with GAAP
An identification of the financial statements audited
That GAAP standards were followed during audit
-
The general group of the 10 PCAOB Auditing Standards requires that:
Auditors maintain an independent attitude
-
Which AICPA quality control standard would most likely be satisfied
when a CPA firm maintains records indicating which partners or employees of the
firm were previously employed by the CPA firm’s clients?
Relevant ethical requirements
-
An audit provides reasonable assurance of detecting material:
Fraudulent financial reporting (YES) Misappropriation of Assets (YES)
-
Which of the following is not included in an integrated audit report on
the financial statements of a public company?
The report states that the audit was performed in accordance with AICPAstandards
-
Included in an integrated audit report on the financial statements of a
public company?
Report indicates that the financial statements are the responsibility of management
Report indicates that the auditors have also audited the effectiveness of the company’s internal control
Report is signed in the name of the CPA firm
-
Audit firms that are subject to inspections by the PCAOB staff include
Audit firms that are registered with the PCAOB
-
Which of the following is not a difference noted when comparing the
AICAP audit report to the international audit report?
The international audit report includes an opinion of internal control
-
GAAS
Generally accepted auditing standards
-
GAAS Principles
Purpose of audit
Premise of audit
Personal responsibility of auditor
Auditor actions in performing audit
Reporting results of audit
-
Purpose
Provide an opinion on financial statements
-
Premise
Client prepares fin statements and provide auditor with needed info
-
Personal Responsibility
Appropriate competence and capabilities and professional skepticism
-
Auditors actions
obtain reasonable assurance that stmnts are free from error or fraud
-
Reporting Results
express in written report the opinion on findings
-
GAAS 10 Standards
General (1-3)
Standards for fieldwork (1-3)
Reporting Standards (1-4)
-
General Standards
1-Adequate technical training
2-Independent mental attitude
3-Due professional care is exercised
-
Standards of field work
1-Adequately plan and properly supervise work
2-Obtain sufficient understanding of client
3-Obtain sufficient audit evidence for opinion
-
Reporting Standards
1-Financial statements presented with GAAP
2-Id principles not consistently applied
3-Info disclosures adequate unless otherwise stated
4-Report should clearly state degree of responsibility of auditors
-
Terminology - Unconditional Responsibillity
Must, Shall, is required
Auditor must fulfill
-
Terminology - Presumptively Mandatory
Should
Auditor must unless alt actions were sufficient and documented
-
Terminology - Responsibility to Consider
May, Might, Could
Auditor should consider
-
GAAS Hierarchy
1-Standards(FASB)
2-Interpretive Publication(Guidance papers)
3-Other Auditing Publications(Textbook)
-
Fraud
- Inherent - built in risk
- Fraud - intentional acts
-
Standard Auditors Report for Non-Public Companies
- Title
- Addresse
- Content Sections
- Signature(Firm Name)
- City and State of office issuing audit report
- Date
-
Content Sections of Report
- Introductory (we have audited)
- Management Responsibility
- Auditor Responsibility
- Opinion Paragraph (Must state GAAP)
-
Materiality
Sufficiently important to influence decisions made by reasonable users of financial statements
BOTH QUANTITATIVE AND QUALATATIVE
-
Other type of auditor reports
Unmodified-good(lack of departure from gaap)
Qualified-bad-(departure from gaap)
Adverse-bad(significant departure from gaap)
Disclaimer-unable to arrive at an opinion
-
Public Company Audit Report
Title (Report of Registered Independent Public Accounting Firm)
Refers to PCAOB rather than GAAS
Includes paragraph that refers to report on internal control
More Brief than nonpublic
-
Performa financial info
as is report
-
Elements of Quality Control
- Leadership top down
- Relevant ethical
- Acceptance and continuance of clients
- Human resources
- Engagement performance
- Monitoring
-
PCAOB members
cannot serve more than two 5 year terms
-
PCAOB inspections frequency
- every year for greater than 100
- every 3 years for less than 100
-
PCAOB inspections focus
evaluate performance of sample of individual audit
report - pass/fail and written to SEC part public part confidential (deficiencies)
-
Peer Review
System Review - study of CPA system
Engagement Review - sample CPA work (less in scope than system review)
Report - pass, fail or pass with deficiencies
|
|