A2 Flashcards
CPA started an FS Audit ..client requested CPA to change to a review because of scope limitation… CPA RVW should include?
Statement that review is substantially less in scope than an audit
MNGMT disregard of its responsibility to maintain an adequate IC environment… should auditor accept the new engagement?
NO!
IC environment is the foundation or all other components
What date defines the date after which existing documentation must not be deleted, and additions to the documentation file must be documented as such?
Document Completion date (not report release date).
Non-issuer changes from Audit to a review… should the report be modified?
NO, if acct agrees w/change acct should issue a rvw report without mentioning a change in engagement.
which of the following inquiries is required before accepting new audit engagement:
1) regarding MGMT integrity
2)matters that may affect the conduct of the audit
3)Understanding prospective client’s business and industry which it operates
1) regarding MGMT integrity
all the others will be AFTER engagement acceptance
Evaluating the adequacy of evidence gathered concerning unusual balances is an example of procedures used in Planning Analytics or Final Review Stage Analytics?
Final Review Stage Analytics
Enhancing the auditor’s understanding of clients business is an example of procedures used in Planning Analytics or Final Review Stage Analytics?
Planning Analytics
Proper segregation of duties reduces the opportunities of any individual to…
Record & conceal fraudulent transaction in the normal course of business
An entity’s control environment includes participation of…
TCWG, MNGMT philosophy, and the organizational structure
Do analytical procedures generally help an auditor to develop their preliminary judgement about materiality? YES/NO
NO
Analytical procedures performed during planning often use data aggregated at HL
In designing a written audit plan, an auditor should establish specific audit objectives related primarily to the:
Financial statement assertions
Audit engagement personnel requirements considered in planning:
1) engagement size & complexity
2) Personnel availability
3) Special expertise required
4) Timing of work performed
5) Continuity and periodic rotation
6) Opportunities for on-the-job-training.
Analytical procedures used in planning an audit should focus on….
Enhancing the auditor’s understanding of client’s business
Manual controls would most likely be suitable than automated controls for….
Large, unusual, or nonrecurring transactions.
Automated controls would be more suitable to…
1) High-volume transactions w/additional calcs
2) Require High degree of accuracy
3) Situations w/ routine errors.
FS Assertions
R&O- rights & obligations
V&A- valuation & allocation
P&C- presentation & classification
Quality Control Standards = 6 interrelated elements of quality control HELP ME =
Human resource
E engagement client acceptance/continuance
L leadership
P performance engagement
M monitoring
E ethical requirements
Auditors primary consideration in evaluation controls is whether specific controls
Affect FS Assertions
Example of strong control environment
MNGMT adheres to IC policies
This is evidence of a strong tone at the TOP
Public (PCAOB) deadline for completion of audit documentation
45 days after report release date
Private (SAS) deadline for completion of audit documentation
60 days after report release date
Best type of control that described procedures to ensure appropriate system software acquisition
General
Not application - no se refire a app aplications es individual transaction no me deje ir por APP mas bien general es proper operation del systema
Proper segregation of duties reduces the opportunities to allow persons to be in position to both
Perpetrate and conceal errors and Fraud.
Auditors usually communicate to MNGMT
Arrangements involving a predecessor auditor