A1 Flashcards
SAS
principle for nonissuers
PCAOB
principle for issuers
GAGAS
principle for governmental
Auditor Responsibilities
Professional skepticism, ethical, Professional judgement, evaluate sufficient audit evidence, use generally accepted auditing standards
reasonable assurance includes
planning work+ supervise assistants, determine materiality, asses risk of material misstatement, obtain sufficient evidence
Material and pervasive
Disclaimer
Material but not pervasive
Qualified
Material and pervasive (Financial Statements)
Adverse
Statements are presented fairly
unmodified
most significant aspect of audit
key audit matter
arise from current periods audit of financial statements
critical audit matter
where does basis for opinion on unmodified statements go?
GAAS
where do managements responsibilities go on unmodified statements ?
GAAP
where do PCOAB auditing standards go on (unqualified)
Basis for opinion section
Where is GAAP included? (unqualified)
Opinion on the Financial statements section
When should you make an adverse opinion?
insufficient disclosures
unjustified departure from GAAP
Unreasonable accounting estimate
Unjustified US GAAP consistency change
when should you make a disclaimer opinion?
inability to perform the substantive test
management refusal to provide a representation letter
timing constraint
refusal for client attorney represent
fails to meet independence requirements.
Restriction on audit caused by client
Scope of Limitation
material misstatement related to uncertainty
Qualified/adverse
insufficient evidence
qualified/disclaimer
scope of limitation examples
inability to provide (inventory, receivables, financial statements), audiT Procedure restrictions, inadequate records, management letter refusal, client attorney response refusal
fundamental to users understanding of financial statements
emphasis of matter
matters other than those presented on the financial statements
other matter
Emphasis of Matter Requirement (CAP)
Consistency (lack of)
Audit opinion change
purpose (Special Purpose Framework)
Explanatory Paragraph Requirements
- opinion based on predecessor auditor
-substantial doubt about ability
-material change between periods
-previous material misstatements
other matter requirements
-restrict the use of the report
-has predecessor auditor
-presented in comparative matter
occurs after balance sheet date but before FS are issued
subsequent event
information presented outside financial statement
supplementary information
fundamental to users understanding of financial statements
emphasis of matter paragraph
