Chapter 1 Gleim Flashcards
Who establishes GAAS?
the Auditing Standards Board and the PCAOB
an auditor’s responsibilities for financial statements are limited to:
the expression of the auditor’s opinion
management is encouraged to:
adopt suggestions made by an auditor
When an accountant performs a review of the financial statements of a nonissuer, they:
seek to establish a reasonable basis for providing limited assurances about the statements
the primary objective of a CPA’s engagement to perform an independent audit of financial statements is to provide assurance to:
the financial statement users (investors)
what is the primary purpose fo the Statements on Auditing Standards (SASs)?
they are generally accepted auditing standards
users of an issuer’s financial statements demand independent audits because
management may not be objective in reporting
definition of reasonable assurance
a high, but not absolute, level of assurance to allow an auditor to detect a material mistatement
which of the following provides the least assurance?
review
audit
compilation
attestation
compilation
what are the two principal conceptual differences between the attestation standards and GAAS?
- the attestation standards provide a framework for the attest function beyond historical financial statements
- the attestation standards accommodate attest services in which the practitioner expresses assurance below the level that is expressed for the traditional audit
not all attestation engagement address
financial subject matter
in performing an attestation engagement, a CPA typically:
reports on a subject matter other than traditional financial standards
how do assurance services differ from consulting services?
assurance services:
1. do not focus on providing advice
2. involve monitoring of one party by another
the objective of assurance services is to:
enhance decision making
assurance services encompass:
audit and other attestation services
