A1 Final Flashcards
When planning to issue audit on specific financial framework to a specific transaction, what should auditor obtain an understanding of?
Form and substance of specific transaction
If information provided to auditor is inconsistent with the financial statements which is the next step the auditor takes?
Request client to revise information
What happens when a client omits a statement of cashflows?
Explain to client it is a violation of GAAP and issue qualified or adverse
How will the opinion be changed if the auditor discovers the titles on the statements are improper?
Qualified opinion with a basis for modification paragraph
What type of opinion is issued when an auditor of a nonissuer is found to lack independence with respect to the entity?
A disclaimer of opinion
Define disclaimer of opinion
When an accountant is associated with the FS of a public entity but has not audited or reviewed such statements
If FS contain a GAAP departure due to circumstances that were unforeseen and not noted by auditor, what type of opinion would be issued?
Unmodified
What part of the opinion states the auditors responsibility to express an opinion on FS under US auditing stds?
AUDITORS RESPONSIBILITY
Where does the Critical Audit Matters section go in the auditors opinion?
Immediately follows the basis of opinion
What are the 4 things in the intro paragraph?
- Nature of engagement (audit)
- FS covered in audit
- name of entity being audited
- dates covered by FS
What type of report is issued for a nonissuer the lacks consistency caused by a material change in GAAP?
Unmodified opinion –> emphasis of mater paragraph after the opinion
If reissuing PY Audit report on a former client, who should the predecessor auditor obtain letters from?
letters of rep from successor auditor AND former clients mgmt
What is the most authoritative level of auditing guidance for audits of nonissuers?
Statement on Auditing Standards ( SAS)
In reporting comparative FS, when should the auditor change the previously issued opinion?
When Py FS are restated to conform with GAAP
What type of report is issued when the auditor does not present the predecessor report?
unmodified w/ other matter paragraph
When would an auditor usually issue an audit unmodified audit opinion w/o EOM?
When the auditor auditor decides to make reference to the audit of component auditor as basis, in part, for opinion.
What is the purpose of dual dating
Used when there is a subsequent event occurring after the original date of report and auditor wants to extend responsibility only for the one event
What term identifies a requirement for audit evidence?
appropriate audit evidence
If an auditor expresses an adverse opinion, what should that opinion paragraph include?
Should include direct reference to separate paragraph disclosing the basis for opinion
if disclaiming an opinion due to lack of audit evidence , where should the the auditor refer to the situation in?
disclosed in the Auditors responsibility AND discussed in an additional paragraph before opinion title “Basis for disclaimer of opinion”
When is a emphasis of matter paragraph needed?
Going concern
Accounting principles that have changed
Audit opinion subjected to change due to uncovered fact
Special purpose framework
Under OCBOA, what is the title for statement of revenue and expenses?
Statement of income-regulatory basis
What does the wording “In our opinion, with the foregoing explanation, the FS referred to above present fairly” represent?
Inappropriate reporting
What are the types of Special purpose frameworks?(5)
- Cash basis and modified cash basis
- Tax basis
- Regulatory basis
- Contractual basis
- Other basis
If substantial doubt - what is included?
Going concern is mentioned in EOM
