Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Becker - AUD > A1 > Flashcards

A1 Flashcards

1
Q

GAAS Hierarchy

3 levels

A
  1. AICPA Statements on Auditing Standards (SASs) and PCAOB Auditing Standards
  2. Interpretive Publications
  3. Other Auditing Publications
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Do nonissuers and issuers comply with the same auditing standards?

y/n

A

NO

  • auditors are required to comply with SASs published by the Auditing Standards Board for audits of nonissuers
  • and comply with PCAOB Auditing Standards for audits of issuers
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

overall objs of the auditor:

A
  • to obtain reasonable assurance

- to report on the financial statement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

general requirements related to the conduct of the audit as an auditor:

A
  • professional skepticism (recognition of material misstatement)
  • ethical requirements (independence in both fact and appearance)
  • professional judgment (materiality, NET (Nature, Extent, Timing)
  • sufficient appropriate audit evidence and audit risk
  • compliance with GAAS
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

conditions that indicate fraud

A
  1. pressure
  2. opportunity
  3. rationalization
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

weak internal control DOES NOT EQUAL

A

an adverse opinion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

fair presentation of an audit opinion

  • unmodified opinion
A
  • adequately disclose
  • consistent
  • reasonable
  • relevant, reliable, comparable, understandable
  • understand effect of material transactions
  • terminology
  • presented fairly
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Unmodified audit opinion

The auditor’s report should have in writing

A
  1. title
  2. addressee (addressee to board, stockholders, not to management)
  3. introductory paragraph
  4. management’s responsibility for the f/s
  5. auditor’s responsibility
  6. Auditor’s opinion (explicit statement)
  7. Other reporting responsibilities
  8. Signature of the Auditor
  9. Auditor’s address
  10. Date of the Auditor’s Report (no earlier than the date on which the auditor has obtained sufficient appropriate audit evidence.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Mr. DIM mnemonics

for management reports

A

Mr. = Management’s Responsibility

D- design
I.- implementation
M - Maintenance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

REPPORTS CRAME mnemonics for auditor’s responsibility

A 
R - responsibility
E - express an opinion
P - plan and perform the audit
P - performing procedures
O - obtain audit evidence
R - risk assessment
T - test internal controls
S - f/s presentation

C - control (internal) no expressing an opinion for controls
R - reasonableness of
A - accounting estimates by
M - management
E - evaluating the overall presentation of the F/s

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

where is GAAS and GAAP in an auditor’s report?

A

GAAS is in the sssscope paragraph (auditor’s responsibility paragraph)

GAAP is in the opinion paragraph

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Reference to the component auditor should not be made in the auditor’s report on the group financial statments unless:

A
  1. the framework are similar
  2. the group engagement team has obtained sufficient appropriate audit evidence to evaluate the appropriateness of the adjustments
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

types of opinions:

A
  • qualified “except for” GAAP
  • adverse GAAP
  • qualified “ except for” GAAS
  • disclaimer GAAS
  • Withdraw
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

qualified “except for” GAAP

A

(Material problems)

  • accounting policy
  • presentation
  • disclosures
  • estimates
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q
  • adverse GAAP
A

(very material problems) Pervasive

  • accounting policy
  • presentation
  • disclosures
  • estimates
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

qualified “ except for” GAAS

A

(Material problems)

- insufficient evidence

17
Q

disclaimer GAAS

A

(very material problem)

  • insufficient evidence
  • going concern
  • lack of independence
18
Q

withdrawal opinioin

A
  • false
  • fraudulent
  • deceptive
  • misleading
19
Q

unmodified opinion

  • Emphasis of matter paragraphs
  • other matter paragraphs

(does not affect the auditor’s opinion)

A

emphasis of matter paragraph - is included in the auditor’s report when required by GAAS or at the auditor’s discretion. Used when referring to a matter that is appropriately presented or disclosed in the financial statements

other matter paragraphs - when required by GAAS or at the auditor’s discretion, other than those presented or disclosed

20
Q

Emphasis of matter paragraph

A
  1. Report requirements
    - goes after opinion paragraph
    - describe the matter
    - indicate the opinion is not modified
    - heading “emphasis of matter”
  2. Use of emphasis paragraph (required when)
    - going concern
    - consistency
    - changing prior opinion
    - special purpose framework
  3. use may be necessary if
    - uncertainty related to the outcome of unsually important litigation or regulatory action
    - major catastrophe
    - related party transactions
    - subsequent events
21
Q

other matter paragraphs

A
  1. report requirements
    - goes after opinion and after any emphasis of matter paragraphs
    - heading “other-matter”
    - describe the matter
  2. use required (when)
    - restricts the use
    - change in audit opinion
    - predecessor’s audit report is not reissued
    - current f/s presented in comparative form, complied or reviewed f/s for the py OR py f/s not audited, reviewed, or complied
    - identifies a material inconsistency in other information
    - report on supplementary information
    - refer to required supplementary info
    - restrict the use, special purpose f/s
    - compliance
  3. use may be necessary if:
    - reasons why cant be withdrawn
    - law, reg, require or permit the auditor to provide further explanation
    - engaged to report on more than 1 set of f/s
22
Q

going concern has 2 components

A

verification and classification

23
Q

Procedures of going concern

ADMITS

A 
A - analytical procedures
D - Debt compliance
M - minutes from meetings
I - inquiry of client;s legal counsel
T - third parties
S - subsequent events review
24
Q

conditions and events of going concern (client admits)

FINE

A

F - financial difficulties
I - internal matters
N - negative trends
E - external matters

25
Q

if py f/s was not audited and cy is audited, then it is a

A

scope limitation

26
Q

if the opinion from py changes in cy, then the format is

DORCS
change/update of opinion

A

the auditor should disclose the reasons in an emphasis of matter or other matter paragraph

D - Date of the auditor’s previous report
O - opinion type previously issued
R - reasons for the prior opinion
C - changes that have occurred
S - statement that the “opinion ……. is different”

27
Q

subsequent event types

A

recognized (type 1) - conditions existing on or before the B/S date
(recorded, looking back, requires a F/S adjustment)

nonrecognized (type 2) - conditions existing after the B/S date
(may require footnote disclosure, looking forward)

28
Q

Auditor’s responsibility for subsequent events

*GR- responsible up to date of audit report *

active responsibility to investigate cert sub event

PRIME

A

P - post balance sheet transactions

R - representation letter should be obtained from management

I - inquiry of management and those charged with governance

M - minutes of stockholers, directors, and other meetings

E - examine latest available interim F/S, compare them with the F/S under audit

29
Q

other information for audit reporting requires

A

revision for a material inconsistency and management refuses to make the revision

30
Q

supplementary information is from where?

A

information from outside of the basic financial statements

31
Q

subsequent events do not effect supplementary information

t/f

A

true

32
Q

supplementary information is reported where?

A

other matters paragraph

OR

as a separate report

33
Q

what are required procedures for required supplementary information?

A
  • inquire of management
  • determine if the supplementary info is consistent with management’s response
  • obtain written management representations regarding the required supple info
34
Q

opinion is not required for supplementary information

t/f

A

true ,however the audit report should include an other matters paragraph about the supplementary information

Becker - AUD (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions