8 Flashcards
Unqualified audit report on ISSUER’S IC over FR
Basis of opinion
IC is the responsibility of management
Mention of management’s report on IC
Parties to the audit report
Management - Create FS
Board of directors- Engages auditor to audit FS
Auditor - Addresses report to board of directors
Disclaimer of opinion
Non of the sections are omitted
SSAE
Examination - Opinion (positive assurance)
Review -Conclusion (Negative assurance)
Review MD&A
Agreed-upon procedures - Findings (no assurance)
What should be included in opinion section on adverse audit report?
Opinion section directly references Basis for adverse opinion.
When management refuses to revise information with material inconsistency, what does auditor do?
-Withhold auditors report
-Withdraw from the engagement
-Include other matter paragraph
Standard review report includes
A statement that the accountant is not aware of any material modification necessary for the FS to comply with GAAP
Disclosures are omitted in complied FS
If the omission is not intended to mislead, Accountants may compile.
Agreed-upon procedures
Accountant issues a report on findings regarding specific procedures.
Single Audit
Audit determined whether the entity complied with laws, regulations, and the provisions of contracts or grant agreements pertaining to federal awards that have a direct and material effect on on each major program.
Variables sampling vs Attribute sampling
Variables (dollar amount)
-Test of details
Attribute (rate of occurrence)
-Test of controls
MD&A
FASB’s GAAP does not require MD&A
Engagement letter is required.
Downgrade in engagement
If reasonable justification exists, no need to mention scope limitation and original engagement
Disclaimer of opinion
Client will not permit inquiry of outside legal counsel
Management refuses to sign representation letter
Independent auditors responsible
Obtaining a general understanding of the legal and regulatory framework
Which opinion when F/S disclosures are inadequate?
Qualified opinion or adverse opinion
