(A5)M1-M4 Flashcards
what is the correct order of steps for an auditor when applying the top-down approach?
evaluation of overall risk at FS level
consideration of controls at entity level
evaluation of accounts, disclosures, and assertions
in an integrated audit of a nonissuer, management is required to do what 3 things
evaluate effectiveness of IC
accept responsibility
document control objectives and the controls that meet those objectives
if management’s report contains a cost-benefit statement, what should the auditor do?
disclaim an opinion on the statement
a scope limitation as it pertains to an audit of IC would require the auditor to issue what kind of opinion?
Disclaimer
in an integrated audit for a nonissuer, does the communication of significant deficiencies/material weaknesses include restrictive language?
No, only for a FS audit
give example of a conceptual difference between attestation standards and GAAS.
attestation standards provide a framework for the attest function beyond historical financial statements
what is the purpose of an attest service (review, examination, agreed-upon procedures)?
for the practitioner to issue a report on subject matter or on an assertion about the subject matter, that is the responsibility of another party
financial projections are for the use of ___
specified parties
which of the following prospective FS is(are) appropriate for general use: financial forecast, financial projection?
financial forecast
an accountant’s report on compiled projected FS should describe the limitations of the projection’s usefulness by stating what two things?
there will usually be a difference between actual and projected results
accountant has no responsibility to update the report for events occurring after the date of the report
generally, if there is a change in engagement (e.g., audit to something else), the report should not reference what unless the new engagement is an agree-upon procedures engagement?
procedures that have been performed in the original audit engagement
when an accountant examines a financial forecast that fails to disclose significant assumptions used to prepare the forecast, the account should issue what opinion?
adverse
are pro forma financial statements required be restricted?
no
T or F, pro forma financial statements and prospective financial statements are the same thing
F, they are not
can an accountant review prospective FS?
no, that is not allowed
In an integrated audit of a nonissuer, management should provide a written assessment about the effectiveness of the entity’s control in a report that accompanies the auditor’s report. The as-of date in management’s assessment should coincide with the date of the ___?
financial statements
