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AUD CPA Flashcards > Audit Reports > Flashcards

Audit Reports Flashcards

1
Q

What should be included for the Auditor’s address?

A

The City and State where located

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2
Q

What is Management Responsible for in regards to the Financial Statements?

A

Preparation and Fair Presentation of Financial Statements in accordance with the Applicable Financial Reporting Framework

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3
Q

What is Management Responsible for in regards to Internal Control?

A

Internal Control Design, Implementation, Maintenance

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4
Q

What are the headings in the Audit Report for an Unmodified Opinion?

A

(TIM-AA) Title; Introduction; Management Responsibility; Auditor Responsibility; Audit Opinion

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5
Q

What are the headings in the Audit Report for an Modified Opinion?

A

(TIMA-BA) Title; Introduction; Management Responsibility; Auditor Responsibility; Basis for (Modified) Opinion; Audit Opinion

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6
Q

In an Unmodified Opinion with Emphasis-of-Matter / Other-Matter sections, what is the order of the headings?

A

(TIM-AA EMO) Title; Introduction; Management Responsibility; Auditor Responsibility; Audit Opinion; Emphasis-of-Matter; Other-Matter

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7
Q

What are the requirements for referencing a Component Auditor in the Audit Report?

A

Component Financial Statements must be prepared using same Financial Reporting Framework as the Group Financial Statements; Component Auditor must have performed audit in accordance with GAAS or PCAOB Standards.

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8
Q

What must the Group Engagement Partner do if they assume responsibility for the Component Auditor’s work?

A

Perform additional audit procedures; Be involved in Component Auditors work; Perform Risk Assessment procedures; Assess Risk of Material Misstatement

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9
Q

What standards govern SSARS engagements?

A

Compilations are governed by SSARS (Statements on Standards for Accounting and Review Services)

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10
Q

Which clients can have compilation engagements?

A

Non-SEC (non-public) registrants only.

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11
Q

What is a Compilation?

A

Accountant puts together financial statements with information PROVIDED BY MANAGEMENT. No opinion is expressed and no assurances are given. Independence is not required.

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12
Q

What disclosures are required for Compilation engagements?

A

Disclosures not necessary must state that they are not included

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13
Q

What standards govern Review engagements?

A

SSARS (Statements on Standards for Accounting and Review Services)

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14
Q

What type of assurance is given in a Review engagement?

A

Reviews give limited assurance.

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15
Q

What procedures are required for Review engagements?

A

Analytical procedures are required for reviews. Compare results to documented predictions.

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16
Q

What is a Review engagement?

A

Financial statements are presented with no opinion expressed- and limited assurances are given. Independence is required for a review engagement.

17
Q

What is a Forecast?

A

A prospective financial statement that uses normal circumstances. General and limited use allowed.

18
Q

What is a Projection?

A

A prospective financial statement using hypothetical situations. Only limited use by the client is allowed.

19
Q

What are the requirements for Agreed Upon Procedures?

A

Independence is required; Only limited use by the client is allowed.

20
Q

What disclosures are required for remote likelihood of losses?

A

No disclosure required.

21
Q

What disclosure is required for a probable loss contingency?

A

Accrue if estimable. Emphasis-of-Matter paragraph if not estimable.

22
Q

What disclosure is made if a loss contingency is reasonably possible?

A

Auditor assesses need for Emphasis-of-Matter paragraph based on loss likelihood.

23
Q

How is a gain contingency reported?

A

Gain contingencies are not reported.

24
Q

How does an immaterial GAAP issue affect the audit opinion?

A

It doesn’t. Opinion is Unmodified.

25
Q

How does a very material GAAP issue affect the Audit Report?

A

Modified-Adverse Opinion is issued. Emphasis-of-Matter paragraph is added after Opinion paragraph.

26
Q

How do GAS standards compare to GAAS?

A

GAS is more strict than GAAS.

27
Q

What is required under the Single Audit Act?

A

An audit performed under governmental auditing standards (GAS). A report on internal control is required. GAAS and GAS don’t require the I/C report.

28
Q

If a group auditor decides to take responsibility for the work of the other CPA, who previously issued an unmodified opinion, how does that affect the Audit Report?

A

Type of Report: Unmodified
Intro Paragraph: No Change
Auditor’s Responsibility Paragraph: No Change
Opinion Paragraph: No Change
Basis of Opinion Paragraph: None Required

Involvement of another auditor does not prevent the issuance of an unmodified opinion.

29
Q

If the group auditor does not wish to take responsibility for the work of the other CPA, who previously issued an unmodified opinion, how does that affect the Audit Report?

A

Type of Report: Unmodified
Intro Paragraph: No Change
Auditor’s Responsibility Paragraph: Modify
Opinion Paragraph: Modify
Basis of Opinion Paragraph: None Required

A division of responsibility affects the Auditor’s Responsibility Paragraph and the Opinion Paragraph, but does not require the inclusion of a Basis for Opinion Paragraph.

30
Q

If the group auditor decides to take responsibility for the work of the other CPA, who previously issued a qualified opinion on the subsidiary’s financial statements. The subject of the qualification is very material to the subsidiatry but is not material in relation to the overall financial statements. How would this affect the Audit Report?

A

Type of Report: Unmodified
Intro Paragraph: No Change
Auditor’s Responsibility Paragraph: No Change
Opinion Paragraph: No Change
Basis of Opinion Paragraph: None Required

Involvement of another auditor does not prevent the issuance of an unmodified opinion. If the other auditor’s opinion is qualified, but the subject of the qualification is not material in relation to the overall consolidated statements, Logan need not make reference to the qualification in their report.

31
Q

The group auditor does not wish to assume responsibility for the work of the other CPA, who previously issued a qualified opinion on the subsidiary’s FS. The subject of the qualification is very material to the subsidiary but is not material to the overall consolidated FS. How does this affect the Audit Report?

A

Type of Report: Unmodified
Intro Paragraph: No Change
Auditor’s Responsibility Paragraph: Modify
Opinion Paragraph: Modify
Basis of Opinion Paragraph: None Required

A division of responsibility affects the Auditor’s Responsibility Paragraph and the Opinion Paragraph, but does not require inclusion of a Basis for Opinion Paragraph. If the other auditor’s opinion is qualified, but the subject of the qualification is not material in relation to the overall consolidated statements, Logan need not make reference to the qualification in their report.

AUD CPA Flashcards (8 decks)

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