A6 Flashcards
when does SSARS apply?
when an auditor prepares, compiles or reviews FS
SSARS
compilation for non-issuers
GAAS
audit engagements for issuers+ non issuers
SSAE
attestation engagements for issuers+ non issuers
SAS
audit engagement for non issuers
ASB
responsible for accounting standards under GAAS
FASB
responsible for GAAP
GAO
single audit act
what is a preparation report considered?
a non-attest engagement
what does documentation in a preparation include?
engagement letter, copy of financial statements, and any significant issues or finding
When are omitted GAAP disclosures included?
It is in conformity with GAAP
-Not misleading to users
-warns users of missing disclosures
difference between compilation and preparation
compilation requires a report and consideration of independence
where is lack of independence disclosed in a compilation
The last paragraph
who are inquiries made to?
internal personnel
what are some items that are required in a review?
obtaining representations, analytical procedures, and inquiries
used to examine relationships between balance sheet accounts
ratio analysis
used to examine relationships between Income statement accounts
trend analysis
examples of analytical procedures done in a review
- compare FS with prior years
- Compare FS with budgets or forecasts
- Compare entity ratios and indicators with other industry entities
- compare relationships in FS within period + prior period
- Compare disaggregated revenue data
In a review what opinion should auditor render if FS contain material misstatements
qualified/adverse
What does additional paragraph contain when prior periods are audited in a review?
- PP statements were audited
- date
- opinion
- no auditing procedures have been performed since previous report date
no assurance, non attest
preparation
no assurance/ attest
compilation
limited/ negative assurance, attest
review
what should an accountant do when unaudited FS are presented in comparative form with audited FS?
- reissue prior period
- include other matter paragraphs describing responsibility for PP
what should each page on an interim FS be marked?
unaudited
what is the objective of a review of interim FS
to see weather material modifications conform with GAAP
what is interim FS conducted with
PCAOB
what happens if interim report is presented in form of registration
accountant’s review is not part of statement.
What are prohibited services to maintain independence?
- bookeeping
- appraisal
- valuation
- actuarial service/ management functions
how many accountants does PCAOB consist of?
2 CPA + 3 Non CPA
What is the independence criteria
- Audit committee can’t accept compensation
- audit committee can’t be affiliated with issuer
what are covered persons
- Audit engagement team
- audit chain of command
3, Partner, principal, shareholder - managerial employee who provided 10+ hours of non-audit services
when can board of directors receive loans?
when they are in the ordinary course of business
