Auditing standard 5, 6

Question 1

when performing and audit in icfr, the auditor is focused on two types of control deficiencies

Answer 1

in design

in operation

Question 2

planning

audit designed to detect

Answer 2

material weakness

Question 3

auditor must report _______ to audit committee and management.

auditor must report _____ to audit comitee

auditor must report _____ to management

Answer 3

material weakness

other significant deficiencies

other lesser deficiencies

Question 4

if the audit committee’s oversight of financial reporting and ICFR is ineffective then it must be reported to

Answer 4

the board of directors

Question 5

reports can be combined or separate. the combined report had 5 paragraphs

Answer 5

intro
scope
definition
inherent limitations
opinion

Question 6

if any material weaknesses exists then must express an

Answer 6

adverse opinion, (unless a scope limitation then it may be a disclaimer)

Question 7

two issues regarding consistency in the audit report are

Answer 7

changes in acc principal

restatements

all in consistencies require an explanatory paragraph

Question 8

if there is a change in acc principal then the auditor should evaluate if

Answer 8

new principal is gaap

method of acc for the change conforms to fasb requirements

disclosures are adequate

alternative principal is justified as preferable

if these four conditions are met then need to add a explanatory paragraph

if these 4 conditions are not met then need to treat as gaap departure (that would potentially require the auditor to modify the audit report)

Question 9

reissued previously issued f/s

Answer 9

add explanatory paragraph

evaluate adequacy of disclosure regarding restatement

a change in classification does NOT normally require mention in the auditor’s report