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aud > Audit - ninja > Flashcards

Audit - ninja Flashcards

1
Q

Agreed-upon procedures in accordance w SSAES

A

Report the diff bw agreed upon n audit procedures

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2
Q

Violation of SEC or PCAOB

A

May not prepare or issue any audit report w respect to that issuer

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3
Q

Cpa changes engagement to a review ac to SSARS bc scope limitation. Cpa review report should:

A

1) refer to scope limitation that caused the change

2) describe the auditing procedures that have already been applied

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4
Q

Cpa should consider ….. when review extent n nature of the risks to internal controls associated w IT?

A

1) entity has responded adequately to the risks arising from IT by establishing effective controls
2) maintain integrity of info n security of data

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5
Q

Supplemental reporting std for gov’t fin audit?

A

Cpa should report scope of their testing of compliance w laws n regulations n internal control

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6
Q

Perform in a review engagement of a nonissuer’s f/s in ac w SSARS?

A

Making inquiries of mgmt

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7
Q

Both an engagement to compile n to review a nonpublic entity’s f/s

A

CPA does not contemplate obtaining an understanding of internal control

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8
Q

When will auditor expect to find that an entity implemented automated controls to reduce risks of misstatement?

A

When transactions are high-volume and recurring

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9
Q

Cpa may accept this engagement only if:

A

CPA also performs procedures on Gold’s fin position & results of operations

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10
Q

Working paper will generally not include:

lease agreement, working trial balance, internal control flow chart or bond indenture agreement

A

a working trial balance

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11
Q

Prior year’s FS require precessor auditor revision, so as a sucessor auditor you should:

A

Ask mgmt to arrange a group meeting for the 3 of them

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12
Q

Successor auditor should ask client to request predecessor auditor to allow you to review ….. documents?

A

predecessor’s working papers

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13
Q

Predecessor auditor allows successor auditor to review her working paper regarding:

A

both contingencies and BS accounts

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14
Q

communicate materiality to governance? yes or no?

A

No, only if mgmt creates troubles

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15
Q

communicate pay rate and hours with governance? yes or no

A

no, that is in the engagement letter

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16
Q

4 matters that communicated to those in charge of governance:

A

1) Auditor’s Resp in relation to FS audit
2) Planned Scope & Timing of Audit
3) Sig. timing of audit
4) Auditor Independence

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17
Q

All independence issues have to communicate to governance in oral or writing?

A

writing

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18
Q

What is most likely to be found on review on client’s cut off period for sales?

A

unrecorded sales at year-end

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19
Q

Those charge with governance means:

A

mgmt or subgroup of governance

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20
Q

Not require to communicate with those in charge of governance?

A

degree of reliance auditor placed on mgmt representation letter

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21
Q

Good governance will not include:

A

Mgmt & those who in governance should be kept seperated (never- interwine at all times)

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22
Q

The objectives of the audit is to express an unmodified opinion, however, in some circumstance it may prevent us from expressing an unmodified opinion:

A

Engagement letter

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23
Q

Is 3rd party a consideration in agreed-upon procedures?

A

no

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24
Q

reducing attestion risk:

A

examination of evidences

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25
Q

performing only substantive procedures, becuase….?

A

control policies and procedures are unlikely to pertain the assertion

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26
Q

auditor’s resp to let audit committee know that any significant deficiency comes to auditor’s attention?

A

yes -(appropriate mgmt to know) through engagement letter

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27
Q

engagement letter establishes an understanding of the resp of …?

A

auditor

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28
Q

auditor must provide reasonable assurance that professional service confirm with professional std by?

A

maintaining a comprehensive systems of quality control that is suitable to its organizational structure

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29
Q

what allow auditor to take an engagement after fiscal year?

A

remedy of limitation resulting from taking an engagement after fiscal yr, like inventory counting, etc

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30
Q

Can an auditor only audit B/S & not other fin reports?

A

Yes, as long as all fin info is not limited for access.

31
Q

Can auditor audit F/S w/o Cash Flow stmt?

A

Yes, if auditor qualified the opnion for the omission

32
Q

initial phase of audit, audit discuss what with mgmt?

A

timing of audit procedures

33
Q

inappropriate to distribute fin projection to?

A

potential stockholders in an offering stmt

34
Q

will engagement includes evaluation of support for the assumption over projection?

A

No.

35
Q

substantive testing:

A

comparing vendor invoices with receiving reports

36
Q

competence of internal auditors:

A

professional certificates, quality of WP

37
Q

auditor should decline audit when?

A

client refuse to let cpa contact legal counsel

38
Q

use another auditor work & take another auditor’s resp, what should you do?

A

review WP and reperform audit testing to validate conclusion

39
Q

can auditor share assessment of inherent risk and control risk with internal auditor?

A

no

40
Q

auditor uses the assessment of material mistatement (inherent risk and control risk) to determine what?

A

detection risk

41
Q

what would affect NET of auditing procedures when internal auditor works relate to assertion?

A

assertion relates to fixed assets addition

42
Q

What is SysTrust?

A

AICPA and CICA (canadian) formed a professional attestation service that offer availability, security & integrity of business system.

43
Q

what is “% coverage rule” of single audit act?

A

any nonprofit that receive more than 50% of ferderal funding will need to select & test those major projects

44
Q

When entity is low-risk, % of coverage rule reduces to?

A

25%

45
Q

When there is a mistatement but auditor fails to find it:

A

Detection risk

46
Q

what provision is it that cpa has to ensure that the client’s website meets a certain criteria?

A

Web Trust, SSAE Stmt on Stds for Attestation Engagement

47
Q

appropriate of audit evidence means?

A

reliable and relevant

48
Q

both compilation and review, auditor does not have to be…?

A

understand th internal control

49
Q

OMB requires nonprofit org to have a single audit or specific project audit if it is over $?

A

$500,000 or more in a yr

50
Q

Which authorization body designs to promulgate attestation std?

A

Auditing Std Board

51
Q

what is subrecipient?

A

nonfederal entity that expends federal awards received from a pass-through entity to carry out a federal program

52
Q

what is an important step for initial planning phase for F/S audit?

A

understanding of risk assessment process

53
Q

Compiled personal unaudited F/S means that the F/S will not be used to obtain credit?

A

yes

54
Q

F/S sends to related parties directly, what is an example?

A

sends to a bank to require a loan

55
Q

stmt of revenue and expenses prepared using special purpose framework?

A

stmt of income - regulatory basis

56
Q

Providing assurance on investmen statistic performance from investment company is a SSAE ?

A

yes

57
Q

Does auditor requires to know the nonprofit org makes use of the federal award and its distribution?

A

no

58
Q

Is auditor must document internal control that complies with laws & regulations?

A

yes

59
Q

inital planning stage for audit?

A

obtain an understanding on risk assessment process

60
Q

auditor most likely use what to determine the preliminary judgement about materiality?

A

annualized interim F/S

61
Q

Internal questonaires are used for?

A

facilitate test of controls

62
Q

always pick the smaller amount for materiality?

A

yes

63
Q

obtain knowledge of client’s industry n environment to?

A

understand the events and transactions that affects the client’s f/s

64
Q

to understand the continue business for the audit planning, the auditor most likely would?

A

review prior year work paper and client’s permanent files

65
Q

what affect the auditability of entity’s f/s?

A

the adequacy of the accounting records

66
Q

you must plan and perform audit of F/S according to GAAS with an attitude of what?

A

professional skeptism

67
Q

objective of planning stage of the audit?

A

assess potential misstatement due to frauds

68
Q

ultimate objective of assesssing control risk?

A

material misstatement will exist in F/S

69
Q

what software extract info from client software?

A

generalized audit software

70
Q

2 frauds:

A

missappropriation of assets or fraudulent reporting

71
Q

what reflects the mgmt philosophy and operating styles?

A

control environment

72
Q

internal control policies and procedures affect?

A

mgmt financial stmt assertion

73
Q

noncompliance with laws and regulations:

A

large amount of cash taken out from the bank

74
Q

noncompliance with laws are hard to detect by auditor due to:

A

it is more operating aspect than accounting aspect

aud (9 decks)

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