Audit 6 Flashcards
Who can revoke or suspend CPA license?
State boards only
An auditor should always be
Objective?
Independent?
Objective yes
But only need to be independent during audit and other attestation services
A covered member is
the audit team
and
the boss office chain of command
Immediate Family is
spouse and dependents
Close relatives
parents, siblings and adult kids
You can only reveal confidential client data when
Subpoenaed
Peer Review
AICPA or State investigation
To your lawyers if being sued by the client
When are Contingent fees permitted
Fixed by courts
Compilations to third parties when stated not independent
Advertisements or solicitations can be misleading or deceptive if?
False or unjustified expectations created
Imply the ability to influence court etc
Intentionally underestimate fees
How long does PCAOB/SEC require auditor to keep audit documentation?
How long SAS for Non issuers require?
PCAOB 7 years
SAS 5 years
What service is the only other service you can provide to issuer if you are auditing them?
Tax services if approved by the audit committee
How often must lead partner rotate on audit?
Other Partners
5 years
7 years
A financial expert qualifies through
education and experience as CFO, CAO, controller, public accountant etc.
Circumstances that impair auditor independence
Owns Stocks bonds etc
Loans to or from client or officers
Savings/Checking accounts with client that exceed $250,000
Credit Card Balances of $10,000
What disciplinary actions can AICPA and state societies take?
They can sanction but cannot revoke or suspend license
What is the objective of detailed substantive testing?
To detect material misstatement
Types of Government Audits
Financial
and
Peformance
What is a Performance Audit of Government?
Measure 3 things
Effectiveness, Economy and Government Control
Internal Control
Compliance
When must government auditors be peered reviewed?
Every 3 years
What features of government audited written report on internal control are frequently tested?
Assertion about compliance with laws
Assertion that specific controls relating to financial reporting are considered
Assertion that no weaknesses or significant deficiencies were found
Single Audits are
Audit of organization receiving $750,000 of federal assistance
Audit Fin stmts
and
Compliance of Federal requirements
Materiality based on EACH major program
How long must audit documentation be kept for government audits?
3 years
The elements of quality control are
Human Resources
Engagement by client
Leadership
Performance
Monitoring
Ethical requirements
Documentation Completion date is…
It is the date after which existing documentation cannot be deleted and additions must be documented
60 days after the report release date for SAS nonissuers
45 days for PCAOB Issuers
A government audit compares to a regular audit how?
They are more extensive
2 CFR 200 is…
The single audit of government entities
How is materiality determined by Single Audit Act?
Either $750k
or
smaller programs use the
“risk based approach”
if risky
For government audit would an auditor express an opinion on effectiveness of internal control over compliance?
No
How is a sub recipient defined in Title 2 of the Code of Federal Regulations?
As a non federal entity that expends federal awards received from another entity to carry out a federal program
Single audits and program specific audits are governed by what law?
2 CFR 200
