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Audit > A1 > Flashcards

A1 Flashcards

1
Q

What is the most authoritative guidance for an audit of an issuer?

A

General guidance provided by PCAOB

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2
Q

What is the best definition of GAAS

A

Measures of quality of auditors performance

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3
Q

What are the 4 things that are required in order to obtain reasonable assurance?

A
  1. plan work and properly supervise any assistants
  2. determine and apply appropriate materiality levels
  3. identify and assess RMM (whether due to fraud)
  4. obtain sufficient audit evidence
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4
Q

Nonissuer: What is in the Intro paragraph? (4 things)

A
  1. nature of engagement
  2. FS covered in audit
  3. name of the entity whose FS are being audited
  4. Dates covered by each FS
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5
Q

Does an issuer have to mention GAAS standards in audit report?

A

No, only PCAOB

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6
Q

Is the opinion and basis of opinion in the same pararaph?

A

No, the opinion should reference the basis of opinion paragraph

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7
Q

What type of report contains the following “in our opinion, with the forgoing explanation, the FS referred to above present fairly”

A

inappropriate reporting

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8
Q

Failure of the FS to contain adequate disclosures of related party transactions results in what type of opinion?

A

Qualified or Adverse

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9
Q

Management’s refusal to furnish a client representation letter will result in what kind of opinion?

A

Disclaimer of opinion (scope limitations)

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10
Q

When issuing a disclaimer of opinion, will the Auditors responsibility paragraph be impacted?

A

yes,

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11
Q

What type of opinion is issued if auditor is unable to determine where there mgmts estimate of the effects of future events is reasonable.

A

Qualified or disclaimer (scope limitation

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12
Q

If auditor qualifies opinion on the basis of scope limitation, the qualification pertains to what?

A

the possible effects on the FS

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13
Q

When should the auditor restrict the use of auditor communication of nonissuer’s financial statements

A

When written communication is based on measurement or disclosure criteria that auditor determined to be suitable only for a limited number of users

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14
Q

How does the change in accounting estimate accounted for?

A

does not affect comparability of FS between periods

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15
Q

How should the accounting change be reflected if there is no material effect on the FS and will have material effect in future?

A

disclosed in the notes to the FS of the CY

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16
Q

When reissuing PY audit reports…Who does the predecessor auditor obtain rep letters from?

A

successor auditor an former client mgmt

17
Q

What audit date is used if the auditor reissues the report?

A

The original report date on the reissued report

18
Q

Where is the emphasis of matter paragraph?

A

After the opinion paragraph

19
Q

If the component does not have independence, what is the first choice of action?

A

Group should attempt to obtain sufficient audit evidence w/o referencing component audit evidence

20
Q

When is dual dating used?

A

When there is subsequent events after original date of auditors report and wants to extended responsibility for one event (not used in comparative statements)

21
Q

When a report is dual dated, what is the auditors responsibility for sub events?

A

it is limited to the specific event referenced

22
Q

When auditing a nonissuer - what type of responsibility should the auditor apply to supplementary information?

A

Should apply certain limited procedures to the supplementary information and add other-matter paragraph regarding the supplemental information to the financial statement audit report

23
Q

If FS are presented in clients “other information” then the auditor should

A

read the other information in a clients document containing audited FS to see if it is consistent with audited FS

24
Q

If management is unwilling to revise or eliminate material inconsistency then what is the auditors first course of action?

A

communicate with those charged with governance

25
Q

What 3 types of accounting bases may be used to prepare FS in conformity with a comprehensive basis of accounting?

A
  1. GAAP
  2. Basis of accounting used in income tax return
  3. Cash receipts and disbursements basis
26
Q

What are reports on special purpose frameworks issued with?

A

Compliance with reporting requirements to be filed with a specific regulatory agency

27
Q

What are the 5 special purpose frameworks?

A
  1. Cash basis and modified cash basis
  2. Tax basis
  3. Regulatory basis
  4. Contractual basis
  5. Other basis
28
Q

If issuing a report on audited FS on cash receipts and disbursements basis of accounting, will there be an EOM paragraph?

A

Yes, stating the basis, referring to footnote that describes it, and indicating that it is non-GAAP basis

Audit (11 decks)

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