6

Question 1

Developing an overall audit strategy involves

Answer 1

1. determining the scope of the audit
2. determining the reporting objectives of the engagement
3. consider various other important factors

Question 2

walkthrough provides evidence to:

Answer 2

1. confirm the auditor’s understanding of the flow of transactions and the design of controls.
2. evaluate the effectiveness of the design of IC
3. confirm whether the controls have been implemented.

Question 3

Suitable criteria in an attestation engagement may be available

Answer 3

publicly and in a CPA’s report

Suitable criteria may be publicly available in the CPA’s report, included w/the subject matter or in the assertion, well understood by users or available only to specified parties.

Question 4

Compilation engagements do not provide

Answer 4

assurance

Question 5

When the auditor’s report states:
The f/s do not present fairly the fin. position, results of operations, or CF in conformity w/GAAP.
The auditor’s report was most likely issued in connection w/the f/s that are

Answer 5

Misleading

The wording in the quote is used for an adverse opinion. Such an opinion is appropriate when f/s are misleading.

Material uncertainties result in either an unmodified opinion w/an emphasis of matter paragraph or a disclaimer of opinion (if sufficient evidence can’t be obtained).

Question 6

Preparation of F/S

Answer 6

can be performed even if the accountant is not independent.

Question 7

When a 3rd party use of prospective f/s is expected, an accountant may not accept an engagement to

Answer 7

perform a review.

Bc the professional stds which present the stds with respect to the accountant’s obligations for prospective f/s, does not allow for the review form of association under any circumstance.

Question 8

The 1st step in reviewing the f/s of a nonpublic entity

Answer 8

Obtaining a general understanding of the entity’s organization, it’s operating characteristics, and its products or services.

Question 9

MD&A assertions

Answer 9

Completeness
Consistency w/f/s
Occurrence
presentation and disclosure

Question 10

An investor observes that the f/s come w/an auditor’s unmodified report. The investor may conclude that

Answer 10

any disputes over significant accounting issues have been settled to the auditor’s satisfaction.

If disputes have not been settled, the auditor should render an opinion other than modified.