Chapter 6 Flashcards

1
Q

Do you provide assurance in preparation?

A

no

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2
Q

Do you provide assurance in compilation?

A

no

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3
Q

do you provide assurance in a review?

A

limited

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4
Q

what happens with the issuance of the report when a accountant performs more than one service?

A

issue the report to highest service rendered

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5
Q

Under DOL rules when is independence impaired?

A
  • direct financial interest/material indirect financial interest in the plan or plan sponsor
  • connection to the plan as promoter, underwriter, investment advisor, voting trustee, director, officer, or employee
  • member of firm maintains financial records
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6
Q

Under DOl rules when is independence not impaired?

A
  • former officer/employee is employed by the firm and individual dissacosciates and does not audit the plan covering their employment period
  • actuary rendered services to the plan
  • accountant was engaged by the plan sponsor during the period of professional engagement with the plan
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7
Q

What is a self interest threat?

A

financial or other interest with influence auditor

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8
Q

What is a self review threat?

A

auditor has provided non audit services and will not appropriately eval judgements made abt non audit services

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9
Q

What is a bias threat?

A

auditor will as a result of political, ideological , social or other convictions take a position that isnt objective

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10
Q

What is familiarity threat?

A

relationship with personnel of audited entity will make them not objective

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11
Q

What is undue influence threat?

A

external influences will impact the auditors ability to be objective

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12
Q

What is mgmt participation threat?

A

auditor taking role of mgmt on behalf of entity undergoing audit

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13
Q

What is structural threat?

A

audit orgs placement in a gov entity in combo with the structure of the gov entity being audited will impact auditors objectivity

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14
Q

What are safeguards

A

reduce acceptable levels of threats to independence

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15
Q

Who was the PCAOB est by?

A

SOX Act

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16
Q

How often must the lead and concurring partner rotate off the engagement ?

A

5 years

17
Q

How often must the other partners rotate off the engagement ?

A

7 years

18
Q

What services so not need to be preapproved by the audit comittee

A

non audit services that do not exceed 5% of total rev

19
Q

What are the permissible non audit services

A
  • tax compliance
  • tax planning
  • tax advice
20
Q

The PCAOB must conduct annual inspections of registered public accounting firms that regularly provide audits to more than how many issuers?

A

100

21
Q

What must the auditor report to the audit comittee when providing non audit services?

A
  • critical accounting principles and practices used
  • alternative accounting treatments discussed with mgmt
  • material written communications between audit firm and mgmt
22
Q

What does section 404 of SOX act require

A
  • annual report of an issuer to include mgmts assessment of the effectiveness of internal controls
  • external auditors to attest to mgmts assessment
23
Q

How often should the PCAOB inspect a registered public accounting firm that regularly issues audit reports to 50 issuers

A

every 3 years

24
Q

PCAOB consist of how many CPA’s

A

2