A2 - Engagement Acceptance & Planning/Supervision Flashcards
In assessing the objectivity of internal auditors, the independent CPA who is auditing the entity’s financial statements most likely would consider the:
Internal auditing standards developed by The Institute of Internal Auditors
What would an auditor most likely use in determining the auditor’s preliminary judgement about materiality?
The entity’s annualized interim financial statements.
In using the work of a specialist, an auditor of a nonissuer may refer to the specialist in the auditor’s report if, as a result of the specialist’s findings, the auditor:
Becomes aware of conditions causing substantial doubt about the entity’s ability to continue as a going concern.
Materiality levels include an overall level for each statement; however, because the statements are interrelated, and for reasons of efficiency, the auditor ordinarily considers materiality for planning purposes in terms of the:
Smallest Aggregate level of misstatements that could be considered material to any one of the financial statements.
In assessing the competence and objectivity of an entity’s internal auditor, and independent auditor would LEAST likely consider information obtained from:
The results of analytical procedures.
An auditor reviews a client’s accounting policies and procedures when considering what planning matter?
Understanding the client’s operations and business.
What would an auditor most likely use in determining the auditor’s preliminary judgement about materiality?
The entity’s financial statements of the prior year
Holding other planning considerations equal, a decrease in the amount of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to:
Perform the planned auditing procedures closer to the balance sheet date.
When issuing an unmodified opinion, the auditor who evaluates the audit findings should be satisfied that the:
Estimate of the total misstatement is less than a material amount.
In designing a written audit plan, an auditor should establish specific audit objectives that relate primarily to the:
Financial statement assertions.
In developing an overall strategy, an auditor should consider:
Preliminary evaluations of materiality, audit risk, and internal control.
An auditor who uses the work of a specialist may refer to the specialist in the auditor’s report if the:
Auditor modifies the report because of the difference between the client’s and the specialist’s valuations of an asset.
In assessing the competence of internal auditors, an independent CPA most likely would obtain information about the:
Quality of the internal auditor’s working paper documentation. Keyword here is COMPETENCE
