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audit > Audit Standards & Engagement Planning > Flashcards

Audit Standards & Engagement Planning Flashcards

1
Q

Standards of Fieldwork

A

PIE
Planning and Supervision
Internal Control
Evidence

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2
Q

PIE

A

Standards of Fieldwork
Planning and Supervision
Internal Control %
Evidence $

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3
Q

Standards of Reporting

A 
CDOG
Consistency - Implicit
Disclosures - Implicit
Opinion - Explicit
GAAP
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4
Q

CDOG

A 
Standards of Reporting
Consistency
Disclosures
Opinion
GAAP
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5
Q

General Standards

A

TIP
Training and Proficiency
Independence
Professional Care

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6
Q

TIP

A

General Standards
Training and Proficiency
Independence
Professional Care

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7
Q

Standards of GAAS

A

10 Standards
TIP
PIE
CDOG

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8
Q

Auditing Standards Vs Audit Procedures

A

Procedures relate to ACTS to be performed, Standards deal with MEASURES IN QUALITY

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9
Q

Statements on Auditing Standards (SAS)

A

2 Categories describe auditor’s responsibility

1) Unconditional Requirement: Must or Required (General, Fieldwork, Reporting standards include MUST)
2) Presumptively Mandatory: Should. Needs complied with, however, in rare circumstances may depart from requirement if document justification (Apply to both Public and Non-Public Audits)

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10
Q

Accepting Engagement

A

Audibility of financial statements

Management Integrity

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11
Q

Communication with Predecessor Auditor

A 
RID-C
Reasons for Change
Integrity of Management
Disagreements during audit
Communication with Audit Committee
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12
Q

Matters Auditor MUST communicate with Audit Committee

A 
oral or writing
DISAPPROVE
Disagreements with Management
Illegal Acts
Significant Accounting Policies
Adjustments
Prior Discussions with Management
Problems
Responsibilities
Other Information
Views of Other Accountants
Estimates
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13
Q

Auditor’s Responsibilities

A

Conducting an Audit in accordance with GAAS

Informing client of any improvements in control or economy of operations

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14
Q

Client’s Responsibilities

A

Making available all records
Not limiting the scope of the auditor’s work
Paying the Fee based on agreed upon method

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15
Q

Engagement Letter

A

FACSIMLE
Written Communication IS Req
Engagement letter is NOT Req but is best

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16
Q

FACSIMLE

A 
Engagement Letter
Fees
Auditor's Responsibility
Scope & Nature of Engagement (Intro & Scope Paragraph)
Internal Control
Management's Responsibility
Irregularities - Fraud
Illegal Acts - Fraud
Errors
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17
Q

Qualitative

A

What

18
Q

Quantitative

A

How much

19
Q

Audit Risk & Materiality

A

Inverse Relationship

20
Q

Steps in Planning an Audit

A

BRAINSTOPS
Basic Discussions with Client
Review of Audit Documentation from previous audits
Ask about recent developments
Interim Financial Statements (performance of such analytical procedures is MANDATORY)
Non-Audit Personnel (to learn more about client)
Staffing for audit
Timing
Outside Assistance
Pronouncements on accounting principles
Scheduling with the Client

21
Q

Supervision of an Audit

A

Instructing Assistants
Reviewing the Work Preformed
Dealing w/differences of opinion among firm personnel: Document difference and ask to be disassociated from the matter’s resolution

22
Q

Audit Risk

A

Inherent Risk x Control Risk x Detection Risk

23
Q

Risk of Material Misstatements (RMM)

A 
IR x CR
Inherent Risk (susceptibility w/o IC)
Control Risk (IC structure will fail)
24
Q

DR

A

TD (Test of Details Risk)

AP (Substantive Analytical Procedures Risk)

25
Q

Solve for DR

A

DR=AR / IR x CR

26
Q

DR goes up

A

RMM goes down, Inverse Relationship

27
Q

Reliance High

A

Substantive Low Inverse Relationship

28
Q

Two types of Fraud

A

Fraudulent Financial Reporting

Misappropriation of Assets (Defalcation Scheme)

29
Q

SQCS

A

Statements on Quality Control Standards

30
Q

SQCS 8

A

6 Elements of Quality Control

HEAL-ME

31
Q

6 Elements of Quality Control

A

HEAL-ME (How does firm ensure quality)
HR
Ethical Requirements (Independence)
Acceptance and Continuance of Client Relationships and specific engagements
Leadership Responsibilities for Quality w/i the firm
Monitoring
Engagement performance

32
Q

Quality Control vs GAAS

A 
Quality Control (Entire Firm)
Conduct of ALL professionals w/i CPA firm on ALL engagements

GAAS (Auditors Work)
Individual Audit Engagement

33
Q

AU

A

US Auditing Standards
SAS (Statements on Auditing Standards)
ASB (Auditing Standards Board)

Applicable to preparation of NONISSUERS audit reports (NOT PUBLIC)

34
Q

PCAOB

A

Public Company Accounting Oversight Board
Publish AS (Auditing Standards)
Oversees audits of public companies ISSUERS

35
Q

AT

A 
Attestation Services
Statements on Standards for Attestation Engagements (SSAEs)
Attestation Standards (AT)
Usually:
Examinations
Reviews
Performance of Agreed-Upon procedures
NOT Compilations
36
Q

AR

A

Statements on Stadards for Accounting and Review Services (SSARS)
Apply to Compliations and Reviews of NONpublic company financial statements
NOT preparing trial balance, assisting in adj, consulting on accounting or tax matters, tax returns, manuals, and processing financial data
NON ISSUER

37
Q

ET

A

Code of Professional Conduct

38
Q

BL

A

Bylaws

39
Q

VS

A

Statements on Standards for Valuation Services

40
Q

CS

A

Statement on Standards for Consulting Services

41
Q

PFP

A

Personal Financial Planning

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