(A5)M5-M8

Question 1

T or F, the client’s auditor can use the service auditor’s report as audit evidence for the client’s internal controls.

Answer 1

T

Question 2

what is a type 1 service auditor report and what does it contain?

Answer 2

is a report on the design and implementation of a service organization’s controls
management’s description of system
written assertion by management “fairly presents the design and implementation…as of a specified date”
“suitably designed…as of a specified date”

Question 3

what is a type 2 service auditor report and what does it contain?

Answer 3

report on the design, implementation, and operating effectiveness of a service organization’s controls
management’s description
written assertion by management “fairly presents the design and implementation…throughout a specified period” “suitably designed…throughout a specified period”
“operated effectively…throughout a specified period”
*allow a reduction in assessed level of control risk for certain areas

Question 4

a compliance report in connection with audited FS provides what kind of assurance?

Answer 4

negative; therefore opinion not rendered

Question 5

a governmental FS audit is conducted in accordance with which two standards?

Answer 5

GAAS and Government Auditing Standards (GAGAS)

Question 6

what is the purpose of a report on internal control over compliance?

Answer 6

to express an opinion on compliance. not for the purpose of expressing an opinion on the effectiveness of internal control over compliance

Question 7

Government Audit Standards define 3 types of engagements, what are they?

Answer 7

financial audits
attestation engagements
performance audits

Question 8

when reporting on compliance with laws and regulations in a financial audit under Government Auditing Standards, are auditors allowed to report fraud directly to external parties?

Answer 8

Yes, it is actually required in some circumstances

Question 9

who issues the Government Auditing Standards?

Answer 9

Comptroller General of the US

Question 10

the audit threshold for federal audit requirements is expenditure of ___ of federal financial assistance.

Answer 10

$750,000

Question 11

program-specific audits rather than single audits are used when? (2 requirements)

Answer 11

expenditures are made under only one program

terms of the award do not require a financial statement audit

Question 12

although both single audits and program-specific audits fall under the Single Audit Act there is a key difference, what is it?

Answer 12

single audit- audit of an entire org. that includes additional procedures on specific programs. Includes a report on FS of the whole org and audit reports on specific programs
program-specific- do not include reports on the FS of whole org.

Question 13

auditee reports, along with auditor reports and findings, must be submitted by the auditee within the earlier of?

Answer 13

30 days of receipt or 9 months after the end of the audit period

Question 14

what reports are issued in a single audit? (there are 5)

Answer 14

FS report (GAAS)
SEFA report (in relation to FS)
GAGAS (yellow book) report
single audit report
schedule of findings and questioned costs

Question 15

an auditor is required to report questioned costs if they exceed what amount?

Answer 15

$25,000

Question 16

in connection with a single audit, both auditor and auditee must retain audit documentation for how many years after issuance/receipt?

Answer 16

3

Question 17

auditors select major programs for audit using what kind of approach?

Answer 17

risk-based that involves methodology but ultimately relies on auditor judgement