AUD 5.02 - Integrated Audit Communication

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  1. Integrated Audit - Nonissuer: What items regarding the internal controls audit must be communicated to management?
    • All deficiencies regardless of severity
    • Significant deficiencies
    • Material Weaknesses
  2. Integrated Audit - Nonissuer: What items regarding the internal controls audit must be communicated to the audit committee?
    • Significant deficiencies
    • Material Weaknesses
  3. Integrated Audit - Issuer: What items regarding the internal controls audit must be communicated to management?
    • All deficiencies regardless of severity
    • Significant deficiencies
    • Material Weaknesses
  4. Integrated Audit - Issuer: What items regarding the internal controls audit must be communicated to the audit committee?
    • Significant deficiencies
    • Material Weaknesses
  5. Communication of significant deficiencies and material weaknesses must be communicated (1) orally, or (2) in writing?
    In writing
  6. Integrated Audit - Nonissuer: Significant deficiencies and material weaknesses must be communicated to the appropriate people by which date?
    The report release date
  7. Integrated Audit - Nonissuer: Deficiencies in internal control that have less impact must be communicated to the appropriate people by which date?
    60 days following the report release date
  8. Integrated Audit - Issuer: Significant deficiencies and material weaknesses must be communicated to the appropriate people by which date?
    • Material weaknesses prior to the report release date
    • Significant deficiencies by the report release date
  9. Integrated Audit - Nonissuer: What are the general topics included in the report to management and the audit committee regarding deficiencies of internal controls?
    • Date internal control audit covered (e.g. 12/31/XX)
    • Auditor's responsibility re. reasonable assurance
    • Definitions of (1) deficiency in internal control, (2) material weakness, (3) significant deficiency
    • Description of and impact from any deficiencies identified (separate material from significant)
    • Limitation of use paragraph
  10. Integrated Audit – Nonissuer: What are the general topics included in the audit opinion report when a separate report from the FS is published?
    • Date internal control audit covered (e.g. 12/31/XX)
    • Mgmt’s responsibility re reasonable assurance
    • Auditor's responsibility re. reasonable assurance
    • Definitions and inherent limitations of internal control over financial reporting
    • Opinion
    • Reference to report on FS
  11. Integrated Audit – Nonissuer – Separate Opinion Report: What date is used on the report?
    The same date as the FS opinion report
  12. Integrated Audit - Material Weakness in Internal Control: What opinion must be given and how does this affect the opinion report?
    • Adverse opinion
    • Add basis for adverse opinion paragraph
    • Title the opinion paragraph “Adverse Opinion” (no title for issuers)
  13. True / False: The auditor believes the oversight of internal control by the audit committee is ineffective. The auditor should communicate this conclusion to the board of directors.
    True
  14. True / False: The auditor is required to search for control deficiencies that are less severe than a material weakness.
    • False
    • The auditor must obtain sufficient appropriate evidence to provide reasonable assurance that a material weakness does not exist.
  15. True / False: No deficiencies were identified during the audit of internal controls, thus the auditor should state this in either the communication to mgmt or the opinion.
    • False
    • The auditor did not test every control or test the controls during the entire year and should make no such definitive claim.
  16. The company makes changes to material weaknesses subsequent to the auditor’s report and wants an updated audit of internal controls. What criteria must be met before performing this audit?
    • This is a separate, voluntary, non-required engagement
    • Management must perform the same functions as the original internal control audit: state their responsibilities, perform tests of effectiveness, provide evidence of such, presents a written report that will accompany the auditor’s report.
    • The auditor is limited to providing assurance on the specific internal controls identified (mgmt said they fixed it - how? The how it was fixed is what we are limited to)
    • The auditor provides the same quality audit & opinion as a full audit
  17. True / False: The auditor should not provide a list of procedures performed during the audit of internal controls in the audit opinion report as this could overshadow a disclaimer of opinion.
    True
  18. True / False: The auditor can issue a disclaimer of opinion on internal controls at any time, including prior to release of the opinion on the FS.
    • True
    • The report can be released as soon as the auditor concludes the scope limitation will prevent the auditor from obtaining the assurance necessary to express an opinion
  19. True / False: The auditor uses a component auditor during the audit of internal controls. The auditor decides to use the component auditor’s name in the opinion of the FS; thus, the same must occur in the audit opinion of internal controls.
    • False
    • The two reports are separate and the decision whether or not to use their name is independent of the FS opinion report.
  20. Is the auditor required to evaluate subsequent events related to internal controls?
    Yes, but only limited to those controls in effect as of management’s report date
  21. How does the auditor evaluate subsequent events related to internal controls?
    • Inquire of management
    • Obtain a written representation letter from management
    • Examine documentation for the subsequent period
  22. True / False: The auditor is responsible to keep informed with respect to events involving internal control that occur after the date of the report.
  23. True / False: The auditor identifies a material weakness, but it only affects one aspect of one acct of the FS. The auditor can thus issue a modified opinion.
    • False
    • The internal controls are either effective or not regarding material weakness; if not, it's automatically an adverse opinion.

Card Set Information

Author:
BethG
ID:
332857
Filename:
AUD 5.02 - Integrated Audit Communication
Updated:
2017-07-12 16:57:11
Tags:
audit AUD
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Description:
Becker Review 2017
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