A1&A2 Flashcards
Auditing standards
v.s.
Auditing procedures
✅ Auditing standards
The quality of the performance of the acts
✅ Auditing procedures
The acts to be performed
@3208
In order to obtain reasonable assurance, the auditor must:
4 steps
- Plan the work and properly supervise any assistants
- Identify and assess risks of material misstatement
⬆️ (fraud or error) - Determine and apply appropriate materiality levels
- Obtain sufficient appropriate audit evidence
@3367
Management is responsible for:
有3
- Preparation and fair presentation of F/S in accordance with the applicable financial reporting framework
- The design, implementation and maintenance of internal control relevant to 1. that are free of material misstatement due to error or fraud.
- Providing the auditor with access to information and persons within the entity needed to complete the audit
@3312
Group engagement partner 決定 refer component auditor 時，要在 ________ state “We did not audit the F/S of X company”
Opinion section
@15005
Subsequently discovered fact that lead to change in an audit opinion may be presented in
Emphasis-of-Matter
or
Other-Matter
@25
A change in accounting principles, effect on comparability of F/S
✅Material
✅Immaterial
要如何表達
✅Material
Unmodified & refer to the change in Emphasis-of-Matter
✅Immaterial
不需說明
@8165
企業的財報採用 IFRS + GAAP，
different report frameworks 要在 _______ stated
Other-Matter
@16329
Material weakness internal control
不會在 Other-Matter 出現
而是會 report to governance
視情況影響 opinion
“In our opinion, except for….. described in the Basis for Qualification section of our report”
是屬於 _________ paragraph
Qualified Opinion
@14985
改變前期的 opinion
Qualified ➡️ Unmodified
要如何 express
Unmodified ➕ Emphasis-of-matter
@15001
A change in accounting principle 是 subsequent event 嗎
不是！
@3366
若F/S 為 Adverse or Disclaim opinion, auditor 就不能對 ________ 有 opinion
不能對 supplementary information 有 opinion
@42
Documentation completion date 🟰
Release date ➕
45 天 (Issuer)
60 天 (Nonissuer)
@5395
Auditor’s documentation of risk assessment should consider the 有 3 of the an entity being auditing
Nature
Size
Complexity
@16297
Quality control elements
HELPME
主要目的是防止
associated with 與 lack of integrity 的企業
@5751
Human Resources
Engagement
Leadership
Performance
Monitoring
Ethical (Independent)
Substantial test 通常在 _______ 執行
After year-end
@2671
After initial planning activity
例如
Evaluate the reasonableness of the client’s accounting estimates
Inquire of the client’s attorney as to whether any unrecorded claims are probable if assertion
@2675
Anticipated sample size @3031
在接受 an engagement to audit a new client, a CPA 必須要 obtain
客戶同意
詢問 predecessor auditor
@2677
Audit process 前中後的 Obtain
前
客戶同意 inquiring predecessor auditor
中
Engagement letter (由 auditor 出具) @3887
Planning stage :
Make a preliminary assessment of materiality @7148
Preliminary understanding of client’s control environment
Understanding of client’s industry and business
Audit committee communication @7148
後
Management representation letter
@2677
還不確定 planning stage 應該在這出現嗎 9/25
Material level 與 Substantive testing 的關係
反向關係
Increase in Material level
會 Decrease audit risk
進而 Decrease substantive testing
@5484
先決定 Material level
再決定 Substantive testing
@3031
Overall material 🟰
&
Performance materiality 🟰
Overall material
🟰Applicable benchmark
✖️Applicable % of “Revenue or other”
Performance materiality
🟰Overall materiality
✖️ Likelihood Application %
@4703
存在於Engagement letter 有
Any specialists will be involved in the engagement @5718
Management’s responsibility to provide certain written representations to the auditor @4736
Signed & dated by client @4447
Objectives of the engagement @4447
Overall audit strategy (but not specific audit procedure) @8152
Limits the auditor’s responsibility to detect errors and fraud @5475
(Only reasonable assurance)
Summarize the timing and details of auditor’s planned field work @2378
Supplementary information 是用於出具________ 意見的財報
p.s. 其資訊是直接衍生自使用於 F/S 而來
Unqualified
Unmodified
Qualified
@17600
Adverse opinion 的 phrase
Disclaimer of opinion 的 phrase
Qualified opinion 的 phrase
✅ Adverse opinion
In our opinion, because of the significance of the matter discussed in the Basis for Adverse Opinion section of our report, the accompanying consolidated F/S do 🔑not present fairly the financial position”…
✅ Disclaimer of opinion
Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our report, we have 🔑not been obtain sufficient appropriate audit evidence” to provide a basis for an audit opinion on these F/S…
✅ Qualified opinion
In our opinion, 🔑except for the omission of information describe in the Basis of Qualified Opinion section in our report”…
@14976
Audit plan 會有
Description of the nature, timing, and extent of
planned risk assessment procedures and
planned further audit procedures
Other audit procedures to be performed to comply with GAAS
@8687
Emphasis-of-matter 要特別強調
Specific matter
and
The matter did not lead to a modified opinion
@162
Special report
Cash basis / Tax basis
@10258
Six main F/S assertion:
COVERUP
- Cutoff (PCAOB 沒有這條) @7686
正確的財報期間 - Completeness
- Valuation, Allocation and Accuracy
- Existence and Occurrence
真實發生 and 存在 - Rights and Obligations
資產的權利 and 負債的義務
不能用來測試 Transaction & event - Understandability of Presentation and Classification
(PCAOB 是 Presentation & Disclosure)
@15054
Auditor’s responsibility is to 評估與檢測 F/S 可能的 material misstatements or fraud，意味著 auditor 應該要著重於評估
Mistakes
Falsifications 虛假報告
Omissions
ChatGPT
@2982
Audit documentation 的主要功能有4
- The principle support for the auditor’s report
- Assistance in the planning, conduct and supervision of the audit
- Accountability
- Useful information
@2359
F/S using cash basis 要在 ______ paragraph
F/S using regulatory basis or contractual basis 要在 _______ paragraph
✅ Cash basis
Emphasis -of-matter paragraph
✅ Regulatory basis (single opinion) or contractual basis
Other-matter paragraph (restricted the use of auditor’s report)
以及
Description of the purpose in the Management’s responsibilities paragraph
@166
Detective risk 是指 auditor 未能發現財報重大錯誤的可能性，所以通常會透過執行 ___________，降低 Detective risk
Substantial test
@ChatGPT x @2939
COSO 由五個組織成立
AICPA
IIA Institute of Internal Auditor
IMA Institute of Management Accountants
AAA American Accounting Association
FEI Financial Executives Institute
@ 466
During an audit, the auditor should maintain an attitude of professional skepticism, which includes a ______ mind and a _______ assessment of audit evidence
Questioning mind
&
Critical assessment
@6872
Auditor’s working trail balance 通常含有 a column for
Adjustments
&
Reclassifications
@2367
Audit objectives and assertions are contained in the
Audit plan
@2367
Attributes of risk 有四
Type of risk
Significant of the risk
Likelihood of the risk
Pervasiveness of the risk
@7597
Substantial doubt about entity’s ability to continue as a going concern, 但無其他缺失, 應
Unmodified ➕ _______
Remain
Alleviate
✅ Remain
(Separate) Explanatory section/paragraph
✅Alleviate
Emphasis-of-matter paragraph
@15771
Client’s books and records are the support for _________.
Audit documentation is the support for the work auditor has done to support the _______ provided on the auditor’s report.
F/S
Opinion
@2643
Substantial test 要在 interim date 測試前，auditor 必須先 assess the difficulty in controlling the ________ risk and determine whether ________ alternative procedure exist to extent the interim conclusion to year-end.
Incremental audit risk
Sufficient
@5505
Accept level of detection risk affects the nature, timing and extent of _____________
As detection risk increase, the assurance (effectiveness) must be provided from ___________ can decrease
Substantive procedures
Substantive tests
@2911
IR & CR 影響
DR
@2911
Audit objectives are based on
F/S assertions
@10832
