Audit 6 Flashcards
How many years must a lead partner rotate off the engagement for an Issuer?
the lead partner must rotate every 5 years.
Nonissuers are not required to rotate.
What services do not need to be pre-approved by the audit committee?
the non-audit services that do not exceed 5% of total revenues from an audit do not require pre-approval.
Under Department of Labor rules what would impair an auditors independence?
if the auditor also serves as an investment advisor to the employee benefit plan.
When can the CPA charge contingent fees upon finding a specific result?
When fixed by courts or other public authorities or in tax matters, if they are based on the results of court proceedings or the findings of governmental agencies.
What is an example of a break in client confidentiality?
if a member whose practice is primarily bankrupt discloses a clients name.
what type of tax services are prohibited?
Tax services related to contingent fee arrangements, confidential tax transactions, and certain aggressive tax transactions are prohibited.
What is section 404?
It is required that each annual report of an issuer include managements assessment of the effectiveness of internal controls over financial reporting
what factors affect the nature and extent of audit procedures?
the risk of material misstatement, the nature of specific audit procedures, the significance of evidence obtained, the extent of any problems identified, and document conclusions that may not be obvious.
What is true of the report release date?
It is the date which grants the client permission to use the report, it is used to define the beginning of the retention period, and is often the date the report is delivered to the client.
What are embedded audit modules?
these are sections of the application program code that collect transaction data for the auditor. They are usually built into the application program when the application is developed. (Meaning CPA need to be involved in the design of the application).
What is test data?
Test data consists of “dummy” data run through the clients computer system. The data should be processed under the auditor’s control.
To make the audit process in using a computer effective and efficient you need to…
Have the appropriate audit task for the computer application and the appropriate software to perform the selected audit task.
what is parallel simulation?
It is a technique in which the auditor reprocesses the clients data using the auditors own software. The auditor compares his or her results to those obtained by the client.
What do you do with the quality control requirement under GAGAS?
Audit organizations seeking to enter in a contract to perform an audit in accordance with government auditing standards should provide the most recent quality control review report to the party contracting the audit.
What is the risk based approach?
Its for Single Audits, and is designed to focus on the auditors test of federal financial assistance on the programs with the highest risk.
