A2 Audit Engagements

Question 1

Issuers

Answer 1

Entities that trade securities. These audits are conducted under PCAOB standards

Question 2

Integrated Audits

Answer 2

Audits of financial statements and of internal controls over financial reporting as required by SOX. Objective is to express opinion on effectiveness of the entity’s ICFR

Question 3

Financial Statement Audits

Answer 3

Objective is to express an opinion on whether the financial statements are presented fairly with applicable reporting framework

Question 4

Nonissuers

Answer 4

Entities that do not trade securities. Audits are conducted under GASS issued by AICPA. Nature of engagements include Reviews, & Compilations.

Question 5

Review Enagements

Answer 5

Provide LIMITED assurance on FS & involves less extensive procedures than an audit. Scope involves inquiries & Analytical Procedures.

Question 6

Compilation Engagements

Answer 6

Presenting information in the form of statements without providing assurance. AKA no assurance engagement despite helping mgmt present FS.

Question 7

Yellow Book

Answer 7

Nickname for Government Accounting Office (GAO) Government Auditing Standards. Provides framework for government related audits.

Question 8

Performance Audits

Answer 8

Evaluate performance of a government organization , programs, activities in order to provide info to improve public accountability.

Question 9

Attestation Engagements

Answer 9

These include examines, reviews, and agreed upon procedures on a subject matter & report the results.

Question 10

Single Audits

Answer 10

These are rigorous org-wide audit of an entity that expends $750K or more of federal assistance received. Required fro states, local gov’s and non profit orgs.

Question 11

Scope of Performance Audits

Answer 11

Cover a variety of objectives including an assessment of program effectiveness, compliance with laws, and and financial or economic impacts.

Question 12

Scope of Single Audits

Answer 12

Obtaining evidence about the use of governmental or other funds to assess compliance with related laws & regulations.

Question 13

Scope of Attestation Engagements

Answer 13

Examination of financial forecasts, reviews of contracts for compliance, reports on internal controls, assurance for sustainability reports.

Question 14

Responsibilities of Auditor

Answer 14

Maintaining professional skepticism, compliance with relevant requirements, exercising professional judgement, obtaining sufficient appropriate evidence, compliance with GAAS.