Be a champion

Question 1

If management makes an assertion that transactions with related parties were conducted on terms equivalent to those prevailing in arm’s-length transactions

Answer 1

the auditor’s report may include a qualified or adverse opinion if evidence cannot be obtained to support management’s assertion

Question 2

AS #18 requires an A of an issuer to obtain an understanding of the company’s process for

Answer 2

Identifying related party tranx and with related parties.
authorizing and approving tranx with related parties.
Acct for and disclosing relationships and tranx with related parties in the FS.

Question 3

what are the 4 conditions that must be met for the auditor to examine IC in an integrated audit under AICPA standards

Answer 3

Mgmt must accept resp for the effectiveness of the entitys IC
Mgmt must eval the effeticeness of the entitys IC using suitable and available criteria.
Mgmt must support its assertion about the effectiveness of the entitys IC with sufficient approp evidence.
Mgmt must provide its written assertion about the effectiveness of the entitys IC in a report that accompanies the auditors report

Question 4

What should an exam report on IC over Fin reporting include?

Answer 4

a paragraph describing the inherent limitations of IC over fin reporting and the fact that errors or fraud may occur and not be detected and corrected as a result.

Question 5

In order for a practitioner to accept an attest engagement to examine and report on an entity’s internal control over financial reporting

Answer 5

management must provide a written assertion about the effectiveness of internal control in a report that accompanies the auditor’s report

Question 6

An engagement to express an opinion on a system of internal accounting control will generally

Answer 6

Be more extensive in scope than the assessment of control risk made during the financial statement audit.

Question 7

Who est int’l standards on auditing

Answer 7

int’l auditing and assurance standards board

Question 8

Who est int’l standards on accounting

Answer 8

Int’l acct standards board

Question 9

What are the diff between US and int’l standards

Answer 9

Integrated audits.
12 months going concern.
Division of responsibility

Question 10

What do auditors need to do before outsourcing professional services

Answer 10

notification and client approval

Question 11

what violates the code of professional conduct

Answer 11

material departures from GAAP

Question 12

Who owns audit documentation?

Answer 12

the auditor

Question 13

What is a contingent fee

Answer 13

a fee est for the performance of any service pursuant to an arrangement in which no fee will be charged unless a specified finding or result is attained, or in which the amount of the fee is otherwise dependent upon the finding or result of such service

Question 14

Can a member receive a referral fee for sending an attest client to another prof? non attest?

Answer 14

nein

ja

Question 15

Tax accountants

Answer 15

can accept referral fees and commissions. they should be disclosed to the client

Question 16

Can members disclose their clients names?

Answer 16

yes unless doing so would disclose confidential information

Question 17

Who can the auditor disclose client info to?

Answer 17

court order or the consent of the client. or a state cpa regulatory body like a quality review board of a states CPA society requests the info

Question 18

Who is a covered member?

Answer 18

Team Member
Person in a position to influence the attest engagement.
A partner, partner equivalent, or manager who provides more than 10 hours of nonattest services to the attest client within any fiscal year.
A partner or equiv in the same office as the lead attest partner
The firm, including the EE benefit plan
An entity whos operating, financial, or acct policies can be controlled by any of the individuals or entities described above

Question 19

Network firm

Answer 19

two firms cooperate to enhance their capabilities to provide prof services and share a common biz strategy

Question 20

What do network firms share?

Answer 20

A common brand
A common control
Professional resources

Question 21

When must network firms be independent?

Answer 21

if use of the audit or review report is unrestricted

Question 22

A member firm may not sign a current-year audit report if

Answer 22

there are unpaid fees for services provided by the firm more than a year earlier.

Question 23

Systrust engagement

Answer 23

SOC 3

Question 24

Precision

Answer 24

the allowance for sampling risk. Used to construct an interval around the sample results in which the true population characteristic is expected to lie. Possible error in either direction is considered

Question 25

If the client refuses to let the auditor mention a going concern issue in the report what effect does this have

Answer 25

this is a GAAP departure. This results in the modification of the review report

Question 26

what should a compilation report state?

Answer 26

that mgmt is responsible for the FS

Question 27

how does the A control the risk of incorrect acceptance when using PPS samplinig?

Answer 27

by specifying a risk level when planning the sample

Question 28

If an auditor discovers that an important audit procedure was not performed what should they do?

Answer 28

nothing, if the audit report can still be supported.

Question 29

What should be included in prospective FS issued in an attestation performed in accordance with SSAE?

Answer 29

all significant assumptions used to prepare the FS

Question 30

What are 3 types of impairments

Answer 30

Personal
External
Organizational

Question 31

What are reviews made in accordance with?

Answer 31

standards est by the AICPA

Question 32

What would a review report include?

Answer 32

All info in the FS are representations of mgmt.
Statement describing the principal procedures performed
Statement describing the auditors conclusions based upon the results of the review

Question 33

When might an auditor accept a contingent fee under the Intl code of ethics for prof accts

Answer 33

if appropriate safeguards are est.

Question 34

A typical audit inquiry is to ask mgmt..

Answer 34

whether there has been a change in working capital since YE.

Question 35

FS should be applied within the framework of GAAP

Answer 35

for auditors judgment concerning the fairness of FS