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Auditing > Audit 2: Other Reports > Flashcards

Audit 2: Other Reports Flashcards

1
Q

OCBOA stands for…

A

Other Comprehensive Bases of Accounting

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2
Q

Some Special Purpose Frameworks

A

Cash Basis
Tax Basis
Regulatory
OCBOA

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3
Q

Additional Requirements for Auditor when preparing in accordance with special purpose framework?

A

Know

  • Purpose prepared for
  • Intended users
  • mgmt knows disclosures needed

Get mgmt to agree

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4
Q

In Auditor’s report what titles to use for Fin Stmts prepared by special purpose framework?

A

Dont Use GAAP titles

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5
Q

Balance Sheet Titles for Special Purpose Frameworks

cash basis

income tax basis

A

Stmt of assets and liabilities arising from cash transactions-cash basis

Stmt of assets, liabilities, and stockholders equity-income tax basis

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6
Q

What does Mgmt Responsibility paragraph need to say when prepared under Special Purpose Framework

A

That the reporting framework is acceptable in these circumstances

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7
Q

When and how to restrict use of report on special purpose framework

A

Restrict always unless prepared on regulatory basis and intended for general use

And if not regulatory use need Emphasis of Matter paragraph

Restrict Use in Other Matter Paragraph

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8
Q

When Regulatory basis report for general use what needs to go in Auditors Report

A

Fairly Presented in accordance to GAAP

Prepared with Special Purpose Framework

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9
Q

Can you report on single Fin Stmt or Specific Element in Special Purpose Framework?

A

Yes but need to report on it separately

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10
Q

What to do when Incomplete Presentation but otherwise GAAP in special purpose framework?

A

Add Emphasis of Matter Paragraph

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11
Q

Negative Assurance is

phrase used

A

Stmt saying nothing came to the Auditor’s Attention that led them to believe entity was non compliant

“nothing came to our attention”

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12
Q

What sort of Opinions can you give on Summary Financial Stmts?

A

Unmodified or Adverse or Disclaimer

Not Qualified due to the Summary nature

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13
Q

If Summary Fin Stmts are to get Adverse or Disclaimer what to do?

A

You should withdraw if you can

Unless forced by law to stay

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14
Q

Levels of Service Below Audit

Assurance

Attestation

Independence

A

Preparation= No No No

Compilation= No Yes Independence not needed but need to disclose status

Review= Yes Yes Yes

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15
Q

Who is authoritative body on unaudited non issuer stmts and what do they issue

A

Acct and Review Services Committee AICPA

Statements on Standards for Accounting and Review Services (SSARS)

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16
Q

When does SSARS apply

A

Preparation of Full Financial Stmts

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17
Q

For Levels of Service Below Audit which need an Engagement Letter?

A

All do including Preparation

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18
Q

During a compilation an Auditor must understand the parts of the clients business.

What are these parts?

A

“STAFF”

Staff Qualifications

Transaction Types and Frequency

Accounting Basis used

Form of acct records

Form of Fin Stmts

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19
Q

The Performance Requirements for a Review are

A 
U LIAR CPA
Understanding with client
Learn Business
Inquiries
Analytical Procedures
Review
Client Rep letter from Mgmt
Professional Judgement
CPA should communicate results
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20
Q

Who should inquires be made of during a review

A

Inquire of Internal people

Not External people

this is a frequent trick question on Exam

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21
Q

What activities do not have to be performed for Review?

A

Test of Internal Controls

Audit Test Work

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22
Q

What opinions can be issued for Review?

A2-52

A

Only Unmodified

cannot do qualified or Adverse

Needs to be modified until it is GAAP or need to withdraw

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23
Q

When performing a higher level of service in the current period what needs to happen to prior period?

A

Needs to be updated and issued as last paragraph of current report

24
Q

Other accountant involved in prior period non-audit report should do what if reissuing?

A

Read the stmts and report
Compare prior and current stmts
Obtain letter from successor CPA saying unaware of any material misstatements

25
Q

If prior accountant does not reissue report what does current CPA need to do?

A

Make reference to prior period report and CPAs

or

perform that level of service themselves

26
Q

If one period is audited what needs to be done

A

Unaudited stmts need to be clearly marked
and
reissue the prior period report
or
include an other matter report assuming responsibility for prior period stmts

27
Q

Comfort letters are…

A

letter to underwriter just before registration of clients securities

It covers date of last auditors report to effective date of registration

28
Q

When should an auditor not comment or provide assurance?

A

On
Market Risk Sensitive Instruments
and
Qualitative Disclosures

29
Q

Attest Engagements are

A

Auditing/examining something other than historical F/S

Ex.

Compliance with laws and regs
Internal Control
Computer Systems
Etc

30
Q

Who issues and what are standards for attestation engagements called?

A

AICPA issues

Statements on Standards for Attestation Engagements (SSAEs)

31
Q

What is the mnemonic for the attestation standards?

A

TIPPY PASS ER

32
Q

What are the general standards of attestation?

A

TIPPY

Training

Independence

Professional Care in Performance and Planning

Professional Knowledge

Your Belief that information can be evaluated

33
Q

What are the Fieldwork Standards of Attestation?

A

PA

Planning and Supervision

Appropriate, Sufficient Evidence to support conclusion

34
Q

What are the Reporting standards of Attestation?

A

SSER

Subject matter Identified

Significant Reservations Disclosed

Express Conclusion

Restrict Use

35
Q

Conclusions that can be reached in Attestation

A

Examination=High Assurance - positive,

Review=Moderate Assurance - negative

Agreed Upon Procedures=No Assurance

36
Q

Conditions needed for Agreed upon procedures

A

I AM SURE

Independence
Agreement btw parties
Measurabilty
Sufficient Procedures
Use is Restricted
Responsibility is Clients
Engagement must include summary of significant assumptions
37
Q

Difference between Financial Forecast and Financial Projection

A

Forecast- expected conditions and expected courses

Projection- hypothetical what if scenarios

38
Q

Pro forma financial stmts are…

A

Financial stmts are not prospective financial stmts

but may be used to demonstrate a hypothetical or future event

Can be review or examination

39
Q

For summary financial stmts what are they prepared to be in conformity/compared with?

A

With the complete financial stmts

NOT GAAP!!!

40
Q

When are compilation reports issued with compiled stms?

A

Always even when Restricted use

41
Q

Financial statements reviewed by an accountant should be accompanied by a report stating

A

a review is substantially less in scope than an audit

42
Q

What kind of report says “substantially less in scope than an audit”?

A

A Review Report

43
Q

Does an auditor express an opinion in a review?

A

No

44
Q

Is a Rep letter from CEO required in a Review?

Compilation?

A

Review=Yes

Compilation=No

45
Q

Cutoff tests occur in what sort of engagement?

A

Audit only

46
Q

In what engagement are analytical procedures used in the final stage?

A

During an audit

47
Q

Can you compare fin stmts that have GAAP disclosure versus ones that do not have them?

A

No

They are not comparable

48
Q

SSARS apply when?

to whom?

A

Reviews of

NonIssuers

49
Q

The objective of a review of interim financial stmts is…

A

What if any material modifications need to be made to conform with GAAP

50
Q

When to talk to predecessor auditor when doing review of a entity’s interim financial information?

A

When it is a public company

Do not need to do if non-issuer

51
Q

Restrict the use during an Attestation when…

A

Material is appropriate only to a limited number of parties

Reporting on agreed upon procedures

Reporting on subject matter and written assertion has not been provided

52
Q

What sort of engagement on financial projections evaluate the hypothetical assumptions used?

A

An Examination does

53
Q

A compilation report on unaudited financial statements of a non issuer should state what?

A

Disclaim an opinion on the financial stmts

54
Q

Do you need to present a hard copy of Report if you submit electronic copy for

Review?

Compilation?

A

No to both, electronic copy only is fine

55
Q

Do you need to obtain a management representation letter for..

Review?

Compilation?

A

Review Yes

Compilation NO

56
Q

The Sufficiency of the procedures performed for agreed upon procedures are whose responsibilities?

A

The Specified parties (usually Management and the audit committee)

NOT the auditor

Auditing (9 decks)

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