Audit Flashcards
Are auditors allowed to draft FS?
Yes - if the company is not SEC-regulated. If the company is SEC-regulated, the auditors are specifically prohibited from drafting AND auditing FS.
The 7 principles adopted by the AICPA are organized around 4 main themes.
Purpose/premise
Responsibility
Performance
Reporting
What should an auditor do to exercise due professional care?
Critically review the judgment exercised by those assisting in the audit.
An independent auditor must have…
technical training and proficiency in auditing
GAAS now means…
Statement on Auditing standards
What are the AICPA’s professional standards of professional requirements
Unconditional requirements
Presumptively mandatory requirements (should)
What are the 6 elements of a quality control system?
HR Monitoring Engagement performance Acceptance and continuance of client relationships Relevant ethical requirements Leadership responsibility
what is the reason for review of audit work by an assistant
to ensure that results are consistent with the conclusions to be presented in the auditor’s report
what are the auditors substantive procedures?
Test of details
Analytical procedures
What are tests of details?
Tests of ending balances
Tests of transactions
What are the 4 basic steps in the audit process
Planning
Internal Control consideration
Substantive audit procedures
Reporting
The auditors standard report refers to both GAAS and GAAP - implicitly or explicity?
explicity
What is an attestation?
the practitioner is engaged to issue an examination, a review, or agreed-upon procedures or an assertion about subject matter, that is the responsibility of another party
When do SSARS apply? (statements on standards for acct and review services)
when the cpa has been engaged to review or compile the FS of a nonissuer (private companies)
When do SSAEs apply?
When a CPA provides assurance on written reps or subject matter other than FS
