Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

ACCT303 > CH 2: Auditing and other Assurance Services (new) > Flashcards

CH 2: Auditing and other Assurance Services (new) Flashcards

1
Q

what 2 services do CPAs provide

A

-assurance services

-nonassurance services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

consulting service is an example of

A

non assurance service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what is an assurance service (definition)

A

-infoenhancement service -CPA
enhance the degree of confidence in information

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

what are the 2 types of assurance services

A

1-those that increase the reliability of info

2- those that involve putting info in a context that facilitates decision making

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

what is an attest engagement

A

a type of assurance service and is an examination, review, or agreed upon procedure performed by a CPA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

3 types of attest engagements

A

-examination
-review
-agreed upon procedure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

the subject matter of an attest engagement is whos responsibility

A

management

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

suitable criteria

A

standards such as GAAP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Finanical statement audits are to check..

A

if fnan statements are following GAAP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

examination

A

-high/reasonable assurance
-low risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

review

A

-limited assurance
-moderate risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

agreed upon procedure

A

-summary of findings
-risk varies
-procedure agreed upon with specified users

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

what is an attest engagement referred to when the subject matter is historical fnan statements

A

audit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What type of attest activity provides reasonable assurance that
the amts in the fnan statements are reasonably correct?

A

audit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

balance sheet audit evidece

A

-all included assets/obligations exist

-includes all assets/obligations

-assets/obs are properly valued

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

income statement evidence

A

-sales have actually occurred

-sales are recorded at correct amts

-recorded expenses are applicable to accting period

-all expenses have been recognized

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

what creates the demand for audits

A

-audits lend credibility of information

-reduce information risk

-does not address business risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

fnan statements misstatements occur bc of

A

-accidental errors

-lack of knowledge of accting principles

-unintentional bias

-deliberate falsification (fraud)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

corporate governance

A

the rules, processes, and laws by which businessess are operated, regulated, and controled

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

effective corporate governance requires..(skip)
.

A

-interests of companys stakeholders to be balanced

-corporations to have a BOD to oversee corporate governance

-public companies have an audit commitee

-publoic company board members must be independent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

sarbanes oxly caused

A

-toughned penalities for corporate fraud

-restricted the types of consulting services CPAs can perform

-created the PCAOB

-reduced sekf regulation

-required an integrated audit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

dodd frank act purpose

A

improve accountability and transparency in the financial system

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

audit vs attest

A

audit- performed to disover risks or issues that may have not ben known before

attest- assurance engagement where a cpa is enaged to issue an examination, reivew, or agreed upon thing to report on subject matter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

who performs attest enagagements

A

only CPA in a public practice

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

what are the 4 types of audits

A

-fnan audit
-compliance audit
-operational audit
-integrated audit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

fnan statement audit

A

audit of the fnan acct info of a company to determine whether they were prepared in conformity with GAAP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

compliance audit

A

a evaluation of a companies orgs adherence to regulatory guidelines

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

examples of compliance audits

A

-IRS audit of taxpayers return

-FDIC examination oby mbank examiners to check w banking laws

-internal auditors performing audit on internal controls and regulations

-payroll compliance

-non profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

compliance attestation

A

agreed upon procedures to help entity with their compliance and must comply with AICPA or PCAOB standards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

operational audits

A

audit to test the effectiveness of operations of specific department to measure its performance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

who is an operational audit performed by

A

usually internal employees

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

is a fnan audit an attest

A

yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

is a complaicce/operationa audit an attest

A

no unless they are doing an agreed upon procedure

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

integtrated audit

A

audit that combines and provides assurance on both fnan statemenets and effectiveness on internal controls

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

is an integrated audit an attest

A

yes if a test of internal controls by a cpa

no if its issued by compnay management on internal auditors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

are audits performed by internal,govt, or tax auditors attest

A

no they are not attest functions

37
Q

internal auditors

A

-employed by the company
-perform operational, compliance, and internal control audits

-report to high level indiviual and audit commitee

38
Q

do internal auditors report to the CFO

A

no. never

39
Q

what is the IIA

A

institute of internal auditors

-develops standards related to internal auditing

40
Q

governement accountaibility office auditors (GAO)

A

perform compliance, operational, and fnan audits for govt agencies

41
Q

tax auditors

A

responsible for enforcement of tax laws (ex state taxes, sale taxes)

-complaince audits of income tax returns

42
Q

AICPA (what does it stand for)

A

American institute of certified public accountants

43
Q

what does aicpa do

A

establishes standards for private companies and auditing standards

-contintuing public education
-research and publication
-self regulation

44
Q

PCAOB

A

public company accounting oversight board

45
Q

cpa exam

A

testing in 4
-auditing and attestation
-fnan acct and reporting
-regulation
-bus env and concepts

46
Q

state board of accountancy

A

issues cpa certficates

47
Q

peer review

A

critical review of ones public acct firms practices by another public accting firm to ensure compliance w professional standards

48
Q

FASB

A

fnan accoutning standards board

sets GAAP for entities other than fedeal, statem and local govt

designated by SEC and AICPA

49
Q

GASB

A

govt accting standardds board

sets accting standards for dnan accting for state and local govt

50
Q

FASAB

A

federal accting stdns advisory board

sets accting standard for the US govt

51
Q

IFAC

A

international federation of accts

sets international accting standards

52
Q

PCAOB role

A

-oversee CPAS of public companies

53
Q

SEC

A

responsibility of PCAOB and protects investors by requiring disclosure of fnan info and offers securities for sale

54
Q

the audit arm of congress

A

GAO govt accouting office auditors

55
Q

forensic accounting is

A

fraud investigation

56
Q

local accoutning firms

A
  • 1-2 offices in a single area with few cpas
57
Q

regional accting firms

A

-offices in neigboring cities with larger staff

58
Q

national

A

offices in most major cities in the US

59
Q

big 4

A

extenive operations in US and globally via a network

60
Q

structure of a national cpa firm

A

partner
manager
senior
staff

61
Q

partner

A

assures that audit is performed in accordance with proffesional standards

62
Q

managers

A

supervise overall engagement

63
Q

seniors

A

in charge of auditors on daily basis
manage staff hours
train staff

64
Q

staff

A

work under the immediate supervision of the senior

65
Q

The AICPA’s Code of Professional Conduct sets forth

A

ethical rules for CPAS

66
Q

peer review relating term

A

quality control

67
Q

internal control relating term

A

basis for sampling and testing

68
Q

GAO relating term

A

Auditing staff reporting to Congress

69
Q

disclosure relating term

A

material information

70
Q

creditbility relating term

A

Critical characteristic that must be maintained by the accounting profession

71
Q

Regulation of auditors of public companies relating term

A

PCAOB

72
Q

Registration statement relating term

A

SEC

73
Q

audited fnan statements relating term

A

opinion

74
Q

Compilation of financial statements relating term

A

accounting service

75
Q

Generally accepted auditing standards Related Term, Phrase, or Organization

A

SASs

76
Q

compliance audit Related Term, Phrase, or Organization

A

internal revenue service

77
Q

operational audits Related Term, Phrase, or Organization

A

internal auditor

78
Q

providing creditbility to various types of info Related Term, Phrase, or Organization

A

attest function

79
Q

reasonable assurance they follow GAAP Related Term, Phrase, or Organization

A

audited fnan statements

80
Q

protection of investors Related Term, Phrase, or Organization

A

SEC

81
Q

compliation and preparation of fnan statements Related Term, Phrase, or Organization

A

acct services by cpa

82
Q

Guide to scope of substantive procedures Related Term, Phrase, or Organization

A

Consideration of internal control

83
Q

Essential element for the attest function Related Term, Phrase, or Organization

A

independence

84
Q

what is business risk

A

the risk associated with a companies survival and profitability

85
Q

infromation risk

A

the risk that the info for a company is not accurate

86
Q

The review of a company’s financial statements by a CPA firm:

A

Is substantially less in scope of procedures than an audit.

87
Q

during fnan statement auditers. seek to restrict which type of risk

A

detection risk

88
Q

who has the primary authority to set accting standardsf

A

FASB

ACCT303 (17 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions