AUD 1 Flashcards
What best describes GAAS?
measures quality of the auditors performance, and “how to perform the audit”
auditing “procedures” are an act to be perfomed
US GAAP is an accounting term that?
encompass the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time
auditor of a nonissuer must conduct the audit in accordance with?
ASB Standards
An auditor may “draft” an entity’s f/s based on info from mgmt’s financial system, this is call a?
“compilation”
Reasonable assurance definition
high, but not absolute
F/S should be prepared in accordance with?
the applicable financial reporting framework, ie GAAP, not GAAS
Who should the auditor’s report be addressed to?
the entity that “engaged” the auditor
Nonissuer’s audit report, should refer to GAAP and GAAS in which paragraphs?
GAAS - Auditor’s responsibility
GAAP - Opinion, and Mgt Responsibility
Issuer, should refer to the audit being conducted in accordance with? where?
PCAOB in “Basis for Opinion” P
GAAP in the “Opinion on FS” section
Type of opinion/report if the statement of CF’s is missing?
Qualified Opinion
If the auditor is unable to form an opinion on opening inventory balances, they may issue an “unmodified” opinion on the CY’s?
closing balance sheet only, and disclaim the I/S, RE, and CFs
when an auditor “qualifies” his opinion bc of scope limitation, the wording in the “opinion” paragraph should indicate that the qualification pertains to?
“the possible effects on the financial statements” and not the scope limitation itself
Uncertainty, types of opinions for related material misstatements, and Insufficient evidence?
MM - qualified or adverse
Insufficient evidence - qualified or disclaimer
A change in accounting principle DOES result in an emphasis of matter paragraph
even if the auditor agrees
A change in accounting principle DOES result in an emphasis of matter paragraph
if it is a “justified” change, and material, even if the auditor agrees
Unmodified, EOM paragraph “following” the opinion
