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NINJA AUD FLASHCARD > Audit Reports > Flashcards

Audit Reports Flashcards

1
Q

What should be included for the auditor’s address?

A

The city and state where the auditor is located.

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2
Q

What is management responsible for in regards to financial statements?

A

Management is responsible for the 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

With regard to Internal Control, management is responsible for:

  • 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 a 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 the 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 auditor’s work
Perform risk assessment procedures
Assess risk of material misstatement

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9
Q

What standards govern compilation 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 disclosures are required for compilation engagements?

A

Disclosures not necessary must state that they are not included.

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12
Q

What standards govern review engagements?

A

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

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13
Q

What type of assurance is given in a review engagement?

A

Reviews give limited assurance.

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14
Q

What procedures are required for review engagements?

A

Analytical procedures are required for reviews to compare results against documented predictions.

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15
Q

What is a review engagement?

A

In a review engagement, financial statements are presented with no opinion expressed and limited assurances are given. Independence is required for a review engagement.

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16
Q

What is a forecast?

A

A forecast is a prospective financial statement that uses normal circumstances.

General and limited use allowed.

17
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.
18
Q

What is a projection?

A

A projection is 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
  1. Independence is required.

2. 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 the Opinion paragraph.

26
Q

How do Governmental Auditing Standards compare to GAAS?

A

GAS is stricter than GAAS.

27
Q

What is required under the Single Audit Act?

A
  • Funding Threshold is $750,000.
  • An audit performed under governmental auditing standards (GAS).
  • Like GAAS, a report on internal control is required.
28
Q

Is a report on Internal Control required?

A

Yes - formerly optional, it is now required

29
Q

If the Auditor finds that the Going Concern Basis of Accounting has been inappropriately applied - what type of opinion should be issued?

A

Adverse Opinion

NINJA AUD FLASHCARD (1 decks)

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