Audit 6

Question 1

Who can revoke or suspend CPA license?

Answer 1

State boards only

Question 2

An auditor should always be

Objective?

Independent?

Answer 2

Objective yes

But only need to be independent during audit and other attestation services

Question 3

A covered member is

Answer 3

the audit team
and
the boss office chain of command

Question 4

Immediate Family is

Answer 4

spouse and dependents

Question 5

Close relatives

Answer 5

parents, siblings and adult kids

Question 6

You can only reveal confidential client data when

Answer 6

Subpoenaed

Peer Review

AICPA or State investigation

To your lawyers if being sued by the client

Question 7

When are Contingent fees permitted

Answer 7

Fixed by courts

Compilations to third parties when stated not independent

Question 8

Advertisements or solicitations can be misleading or deceptive if?

Answer 8

False or unjustified expectations created

Imply the ability to influence court etc

Intentionally underestimate fees

Question 9

How long does PCAOB/SEC require auditor to keep audit documentation?

How long SAS for Non issuers require?

Answer 9

PCAOB 7 years

SAS 5 years

Question 10

What service is the only other service you can provide to issuer if you are auditing them?

Answer 10

Tax services if approved by the audit committee

Question 11

How often must lead partner rotate on audit?

Other Partners

Answer 11

5 years

7 years

Question 12

A financial expert qualifies through

Answer 12

education and experience as CFO, CAO, controller, public accountant etc.

Question 13

Circumstances that impair auditor independence

Answer 13

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

Question 14

What disciplinary actions can AICPA and state societies take?

Answer 14

They can sanction but cannot revoke or suspend license

Question 15

What is the objective of detailed substantive testing?

Answer 15

To detect material misstatement

Question 16

Types of Government Audits

Answer 16

Financial
and
Peformance

Question 17

What is a Performance Audit of Government?

Answer 17

Measure 3 things

Effectiveness, Economy and Government Control

Internal Control

Compliance

Question 18

When must government auditors be peered reviewed?

Answer 18

Every 3 years

Question 19

What features of government audited written report on internal control are frequently tested?

Answer 19

Assertion about compliance with laws

Assertion that specific controls relating to financial reporting are considered

Assertion that no weaknesses or significant deficiencies were found

Question 20

Single Audits are

Answer 20

Audit of organization receiving $750,000 of federal assistance

Audit Fin stmts
and
Compliance of Federal requirements

Materiality based on EACH major program

Question 21

How long must audit documentation be kept for government audits?

Answer 21

3 years

Question 22

The elements of quality control are

Answer 22

Human Resources

Engagement by client

Leadership

Performance

Monitoring

Ethical requirements

Question 23

Documentation Completion date is…

Answer 23

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

Question 24

A government audit compares to a regular audit how?

Answer 24

They are more extensive

Question 25

2 CFR 200 is…

Answer 25

The single audit of government entities

Question 26

How is materiality determined by Single Audit Act?

Answer 26

Either $750k
or
smaller programs use the

“risk based approach”

if risky

Question 27

For government audit would an auditor express an opinion on effectiveness of internal control over compliance?

Answer 27

No

Question 28

How is a sub recipient defined in Title 2 of the Code of Federal Regulations?

Answer 28

As a non federal entity that expends federal awards received from another entity to carry out a federal program

Question 29

Single audits and program specific audits are governed by what law?

Answer 29

2 CFR 200