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Assurance > Assurance > Flashcards

Assurance Flashcards

1
Q

What are the contents of an engagement letter?

A

Objective of the audit
Scope of the audit
Auditors responsibility
Applicable reporting framework
Management’s responsibility
Form of any reports resulting from engagement

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2
Q

Audit evidence ISA

A

500

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3
Q

Understanding the entity and environment and assessing risks ISA

A

315

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4
Q

What are the contents of the auditors report?

A

Title
Addressee
Auditors opinion
Basis for opinion
Going concern section
Key audit matters
Other information section
Responsibilities of management for the financial statements
Auditors responsibility for the audit of the financial statements
Opinion on other matters
Matter on which the auditor must report by exception
Name of engagement partner
Signature of engagement partner
Auditors address
Date of report

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5
Q

What are the roles of the audit committee?

A

Review integrity of FS and formal announcements relating to performance
Monitor and review effectiveness of internal audit function
Make recommendations to the board regarding the external auditor
Monitor independence of external auditor
Implement policy on provision of non audit services by external auditor
Review company’s internal financial controls and risk management systems

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6
Q

What is authorisation and approval?

A

Approval of transactions/documents

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7
Q

What are reconciliations?

A

Comparison of two or more data elements

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8
Q

What are verifications?

A

Comparison of two or more items with each other or with a policy

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9
Q

What is the role of internal audit?

A

Monitor internal controls
Examine financial and operating information
Review the economy, effeciency and effectiveness of operations
Review compliance with laws, regulations and other external requirements
Special investigations
Identify and evaluating significant exposures to risk
Assess the governance process

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10
Q

What are the contents of a working paper?

A

Client name
Reporting date
Name and date of preparer
Name and date of reviewer
File reference and appropriate cross referencing
Subject
Conclusions drawn and key points highlighted
Objective of work done
Source of information
Information on sample size and selection
Work done and results obtained
Key to any symbols/audit ticks
Analysis of errors

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11
Q

What is the random method of selection?

A

All items have equal chance of selection

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12
Q

What is systematic sampling selection?

A

Constant interval between items

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13
Q

What is haphazard sampling?

A

Choosen at will

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14
Q

What is MUS?

A

Sampling unit is the individual monitory unit in the population

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15
Q

What’s is sequence sampling?

A

Consecutive items

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16
Q

How long can an engagment partner serve on the audit of a non public interest entity?

A

10 years

17
Q

How long can an engagement parter serve on the audit of a public interest entity and when can they return?

A

Can serve for 5 years and after 5 years

18
Q

At what percentage of total fee income is it reasonable to accept a listed client?

A

5%

19
Q

At what percentage of fee income is it a threat to accept a listed client?

A

10% (between 5-10% safeguards should be in place

20
Q

At what percentage of fee income is it reasonable to accept a non listed client

A

10%

21
Q

At what percentage of total fee income is it a risk to accept a non listed client?

A

15% (between 10-15% safeguards should be in place)

22
Q

After how long can a key audit partner accept a key management position with their client?

A

2 years

23
Q

What is the current ratio?

A

How many times over can your current assets cover your current liabilities

24
Q

What is a quick ratio?

A

How many times your liquid assets can cover your current liabilities

25
Q

What is a test of details?

A

The process used to test/verify the details of individual transactions or balances

26
Q

What is only reported on by exception?

A

RAPID

Returns from branches not visited have been received

Accounts agree to the underlying records

Proper (adequate accounting records have been maintained)

Information and explanations have been received (and full access has been given to Auditors)

Directors transactions have all been correctly disclosed

27
Q

What audit assertions relate to account balances?

A

VERC
Existence
Completeness
Right and obligations
Valuation

28
Q

What audit assertions relate to classes of transactions?

A

CACOC
Occurance
Completeness
Accuracy
Cut off
Classification

29
Q

What audit assertions relate to presentation and disclosure?

A

Occurrance
Completeness
Classification
Accuracy and valuation

Assurance (2 decks)

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