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CPA Audit > Audit Review Flash Cards > Flashcards

Audit Review Flash Cards

1
Q

Preparation and Fair presentation of F/S requires: (3 things)

A
  1. ) Applicable Framework
  2. ) Preparation and fair presentation
  3. ) Inclusion of adequate description of the framework in the F/S
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2
Q

What is GAAS

A

Generally Accepted Auditing Standards

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3
Q

What is GAGAS

A

Generally Accepted Government Auditing Standards

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4
Q

PCAOB facts!

A

Sarbanes Oxley Act of 2002

Issuers must register with PCAOB

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5
Q

What does IASB

A

International Standards on Auditing

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6
Q

Attestation Engagements

A

SSAE issued by AICPA

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7
Q

Accounting and Review services

A

SSARS - For reviews and compilations for non-issuers ONLY

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8
Q

GAAS Heirarchy

A

SAS – Non issuers
PCAOB – Issuers
Interpretive Publications – Help auditors help professional skepticism, but not audit standards
Other auditing publications – No Authoritative status.

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9
Q

MR DIM – Unmodified Report

A

Management’s Responsibility: Detection, Implementation and Maintenence of Internal control

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10
Q

REPPORTS – Auditor’s Responsibility paragraph

A

Responsibility, Express, Plan (Audit), Perform (procedures), Obtain (audit evidence), Risks (of MM), “Test” (I/C), statements,

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11
Q

CRAME – Auditor’s Responsibility Paragraph

A

(internal) control, (policies/estimates) reasonable, accounting (estimates), made by Management, evaluating (overall presentation).

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12
Q

What is the structure for Unmodified Opinion report

A 
Title
Addresse: not to management
MR
AR
Opinion
Signature
Auditor's address
Date of Report
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13
Q

What are the reference to audit standards

A

Issuers = PCAOB
Non Issuers = GAAP
International = ISA

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14
Q

Reference to GAAS and GAAP are in what paragraphs of a standard report?

A

GAAS = SCOPE

GAAP = oPinion paragraph

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15
Q

What are the key terms for Auditing Group of F/S

A

It requires components, Component auditor, Group engagement team etc.

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16
Q

Referencing a Component Auditor only made with what guidelines?

A

Not restricted, and conducted in PCAOB issuers, GAAS non issuers.

The framework is similar.

17
Q

If the Group Auditor Assumes responsibility what needs to be done?

A

No reference should be made. Must audit anything that are risk of MM. Basically takes responsibility but not really. No permission is needed.

18
Q

When is an Emphasis of Matter required?

4 Requirements

A
  1. ) Substantial doubt going concern
  2. ) Justified Accounting principle change (consistency)
  3. ) Subsequent discovered facts that change opinion
  4. ) F/S are prepared in special framework
19
Q

When is an Emphasis of Matter a Professional judgement?

There are 4

A
  1. ) Uncertainty (litigation)
  2. ) Major Catastrophe
  3. ) Related party transactions.
    4) Subsequent events
20
Q

When is Other matter paragraph required?

9 Requirements!

A
  1. ) Restricts the use
  2. ) change in audit opinion on subsequently discovered facts
  3. ) audited by predecessor and not reissued
  4. ) comparative that is compiled/or reviewed and prior wasn’t audited/reviewed or compiled.
  5. ) Material inconsistenty in other information
  6. ) Supplementary information is included
  7. ) required supplementary information
  8. ) restrict use of special purpose financials
  9. ) compliance is included in auditors report
21
Q

Going Concern Procedures (acronym)

A

CPA “ADMITS” there’s a going concern problem:

Analytical Procedures
Debt compliance - Review Debt/loan Agreements
Minutes for meetings
Inquire legal council
Third parties 
Subsequent Events review
22
Q

Going Concern Procedures (acronym)

A

CPA “ADMITS” there’s a going concern problem:

Analytical Procedures
Debt compliance - Review Debt/loan Agreements
Minutes for meetings
Inquire legal council
Third parties 
Subsequent Events review
23
Q

An Emphasis of matter paragraph for going concern includes which two phrases?

A

Substantial doubt – Going concern

24
Q

Going Concern stuff:

When do you use an unmodified opinion vs adverse/disclaim?

A

Depending on the disclosure: If adequate Unmodified with emphasis of matter paragraph

25
Q

Which paragraphs are changed in Qualified/Adverse report?

A

Intro and MR paragraph is unchanged
Auditor’s responsibility (last sentence/paragraph)
Basis for ____ opinion paragraph is added
Opinion paragraph is changed indicating except for Qualified

Opinion paragraph is changed indicating because of not presented fairly for Adverse

26
Q

Which paragraphs are changed in Disclaimer?

A

Intro paragraph is changed: “Auditor was engaged in audit”

MR no change

AR paragraph: Disclaimer: Not able to obtain sufficient appropriate evidence

Basis for Disclaim

Opinion paragraph: Disclaimer of opinion

If not independent: state in seperate paragraph

27
Q

Which paragraphs are changed in Qualified (Scope?)

A

Auditor’s responsibility: Audit evidence is sufficent and appropriate to provide qualified opinion

Basis for Qual opinion

Opinion paragraph: Qualified: “except for..” “presented fairly”

28
Q

Which paragraphs are changed in Qualified (Scope?)

A

Auditor’s responsibility: Audit evidence is sufficent and appropriate to provide qualified opinion

Basis for Qual opinion

Opinion paragraph: Qualified: “except for..” “presented fairly”

29
Q

Comparative Financials: When they update the opinion (acronomyn)

A

Required disclosure: DORCS change their mind in the other matter paragraph

Date of auditors previous report
Opinion previously issued
Reason for prior opionon
Changes that have occured
Statement that opinion is different
30
Q

Predecessor Auditor: What are all the things the successor auditor must understand?

A
  1. ) Reissue the Predecessor report
  2. ) Not reissue the report
  3. ) Prior period is reviewed/compiled
31
Q

Predecessor Auditor: What are the requirements to Reissue Predecessor report?

A

Old CPA should:

  1. )Read the statement for current period,
  2. )Compare the statements audited,
  3. )Obtain a letter of representation from Successor auditor.
  4. )Inquire of and obtain a letter of representation from management.

report should be dual dated if revised, unrevised = original report

32
Q

Report of Predecessor auditor is not issued, what must be done?

A

New CPA should:

  1. ) Predecessor should not be named
  2. ) Type of opinion expressed by predecessor and reasons
  3. ) Any emphasis or other matters
  4. ) Date of predecessor report
33
Q

If predecessor auditor compiled/reviewed what must be done?

A

Include other matter paragraph: Service, Date, description of any modifications. Statement that it was less in scope of an audit and does not provide any basis.

CPA Audit (2 decks)

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