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financial reporting > Chapter 11 - Finishing the Audit > Flashcards

Chapter 11 - Finishing the Audit Flashcards

1
Q

what occurs during the beginning of the year?

A

interim testing

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2
Q

interim testing includes..

A

test of controls and substantive procedures

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3
Q

what occurs at year end?

A

going concern review, adjusting JE, review subsequent events substantive procedures

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4
Q

roll forward procedures:

A

extended work from intern period to date of financial statement s

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5
Q

roll forward procedures include…

A

both substantive and test of controls

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6
Q

roll forward procedures are performed…

A

following the date of FS

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7
Q

idea of roll forward is to…

A

obtain evidence through the date of FS

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8
Q

roll forward usually changes method for _____ risk areas

A

low

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9
Q

there is a high level of analytical procedure at…

A

year end

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10
Q

analytical procedures are required at…

A

interim testing and year end

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11
Q

near the end of the audit, analytical procedures identify…

A

unusual or unexpected relationships not previously identified

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12
Q

analytical procedures:

A

study of relationships between financial and non financial data

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13
Q

analytical procedures review accounts for…

A

“miscellaneous”, “other,” and “cleaning” accounts

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14
Q

accounting estimates review…

A

managements process for developing estimates and the reasonableness

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15
Q

to audit accounting estimates, we must…

A

have a high understanding of management

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16
Q

flow of attorney letter

A
  1. auditors request from client
  2. audit mails it
  3. attorney replies
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17
Q

attorney letters can come from both…

A

internal and external lawyers

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18
Q

written representative are provided by _____ to ____

A

management; auditor

19
Q

WR are dated using…

A

date of auditors reports (audit completion date)

20
Q

broad purposes of WR

A
  1. impress on management their responsibility for FS
  2. may establish auditors defense if a question related to inquiries subsequently arises
21
Q

what happens if WR is not provided?

A

qualify or disclaim opinion

22
Q

3 major parts of WR

A
  1. info related to FS
  2. info provided to auditors by management
  3. IC over financial reporting (public)
23
Q

what is included in the info related to FS section of WR?

A
  1. management responsibility for FS and IC over FR
  2. appropriate disclosure, presentation, and reasonableness of items
  3. statement that uncorrected misstatements are immaterial
24
Q

if concerns for going concern do not remain…

A

do nothing

25
Q

if concerns for going concern continue…

A

disclose in FS and modify report

26
Q

accumulate $ effect of…

A

identified misstatements

27
Q

2 methods for evaluating materiallity

A

roll over, iron curtain

28
Q

rollover method considers…

A

just the current period

29
Q

iron curtain method considers..

A

aggregate effect of the adjustments on the BS

30
Q

audit supervisor asks…

A

have all the steps been performed?
is referencing clean?
are explanations understandable?

31
Q

manger/partener ask..

A

is the overall scope adequate?
do overall conclusions support the opinion?

32
Q

reviewing partner asks…

A

is quality consistent with firm?
engagement quality review

33
Q

pushing back date of FS increases…

A

liability

34
Q

procedures following audit report release date

A
  1. omitted procedures
  2. communication with those charged with governance
  3. management letters
35
Q

perform omitted procedures if..

A

they are important and individuals are currently relying on that info

36
Q

no further action is neccessey for omitted procedures if…

A

previous opinion is supported

37
Q

with omitted procedures, if previous opinion cannot be supported…

A

withdraw original report, issue revised reports, inform persons relying on FS

38
Q

what needs to be communicated with individuals charged with governance?

A

significant Ic deficiencies and material weakness

39
Q

for public companies, communication to governance must be…

A

before audit report date

40
Q

for non public companies, communication to governance must be..

A

within 60 days after audit report date

41
Q

management letters are from ____ to _____

A

auditor to management

42
Q

are management letters required?

A

no

43
Q

management letters are prepared as a by-product of…

A

procedures performed in audit

44
Q

management letter provide…

A

recommendation to client for improving effectiveness and efficiency of operations

financial reporting (12 decks)

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