Ch 1

Question 1

Which standards provide the most authoritative U.S. auditing guidance for nonissuers and issuers, and who issues those standards?

Answer 1

Nonissuer: statement on auditing standards by AICPA Issuers: Auditing Standards issued by PCAOB

Question 2

Primary purpose of an audit

Answer 2

to provide financial stmt user with an opinion on whether the financial stmt are fairly presented, in all material respects, in accordance with fin reporting framework

Question 3

What are the 5 general GAAS req. related to the conduct of an audit?

Answer 3

S- professional Skepticism E- ethical requirements J-professional Judgement E- Sufficient and appropriate audit evidence C-compliance with GAAS

Question 4

3 inherent limitations of an audit?

Answer 4

-nature of financial reporting -nature of audit procedures -timeliness of financial reporting

Question 5

when should an auditors opinion be modified?

Answer 5

-auditor determines that the FS as a whole are materially misstated -auditor is unable to obtain sufficient appropriate audit evidence

Question 6

list in order the primary sections of an unmodified audit opinion

Answer 6

-Title -Addressee -Introduction -Mgmt REsponsibility for FS -Auditor Responsibility -Opinion -Report on Other Legal REgulatory Req

Question 7

what should be included in the intro paragraph of the unmodified audit opinion ?

Answer 7

-entity whose FS have been audited -stmt that FS were audited -title of each FS audited -Dates or periods covered by each FS

Question 8

What should be included in the management responsibility paragraph of the unmodified audit opinion

Answer 8

• an explanation that mgmt is resonsible for the preparation and fair presentation of the financial stmt in accordance with applicable financial reporting framework
• stmt that this respponsibility includes the DIM of internal control relevant to the prep of FS

Question 9

What should be included in the auditors responsibility paragraph of the unodified audit opinion?

Answer 9

• stmt that it is the audiors responsibility to express an opinion on the FS based on the audit
• stmt that the audit was conducted in accordance with generally accepted auditing standards in USA
• stmt that the standsards require that the auditor plan and perform audit to obtain reasonable assurance about whether FS are free from material missatement
• descirption of the audit
• a stmt whether the auditor belives the audit evidence obtained is suffecient for a opinion

Question 10

What shoudl be included in the opinion paragraph of the unmodified audit opinion (nonissuer)

Answer 10

• stmt that the FS present fairly in all material respects, financial position of the entity as of the BS date
• ID of the applicable financial reporting framework and its origin

Question 11

where in the standards unmodified opinion does (nonissuer) does the auditor refer to 1. the applicable financial reporting framework 2.. GAAS

Answer 11

• applicable framework is referred to in the mgmt responsibility paragraph and oopinion paragraph
• GAAS is referred to in the auditor responsbility paragraph

Question 12

list in order the primary sections of an unqualified audit opinion (issuer)

Answer 12

• title
• addressee
• opinion section
• basis for opinion
• signature, tenure, location
• reporti date

Question 13

what should be included in the opinion section of the unqualified audit opinon (issuer)

Answer 14

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