5 Flashcards
Concerning significant deficiencies in an audit
Auditors should NOT issue “no significant deficiencies were identified”
What is discount rate?
Interest rate the Fed charges commercial banks for short term loans. Fed raises discount rate, Short-term interest rates will increase.
Components of internal control
Control activities
Risk assessment
Information and communication
Monitoring
Environment
Audit committee functions
•Oversee financial reporting process
•Ensure financial information is reliable and available to stakeholders
•Present annual audit to board
•Recommend external auditors
•Oversee audit and control systems
Which is assessed in no quantitative terms?
CR, IR, DR
Lapping AR
Segregation of duties prevent lapping.
Analytical procedures in planning
Identify the risks of material misstatements due to fraud
GAAS F/S audit
GAGAS financial audit
Single audit
GAAS F/S audit
-Financial statements
GAGAS financial audit
-I/C
-Compliance w/laws®ulations
Single audit
-Schedule of federal award expenditure
-Schedule of findings & questioned costs
-Summary of audit results for FS, IC & compliance
CPA firms’s system of quality control
Is required
Applies to audition and accounting engagements
Is comprehensive
Consists of polices and procedures
Provides reasonable assurance that the firm
-Complies with professional standards
-Issues appropriate reports
Substantive procedures
Substantive analytical procedures
-Test the reasonableness of amounts
Tests of details
-Test directly for misstatements (A/R confirmation)
Four procedure of testing control
RIIO
Reperformance
Inspection
Inquiry
Observation
Negative confirmation
No response requires
-small balance
-low risk
Emphasis of matter paragraph
EOM-matters properly presented or disclosed in the FS
-Appropriate heading
-Opinion is NOT modifying
-Reference to matter being emphasized
Which section does the nonissure’s auditor disclaim on internal control
Auditors responsibilities section
Qualified opinion report
State “except for”
