Chapter 6 Deck 5 Flashcards
Tests of the operating effectiveness of controls may be required if any one of the following exist:
The risk assessment includes an explanation of the operating effectiveness of controls over compliance,
Substantive procedures do not provide enough evidence to support a conclusion, or
Tests of controls are required by the applicable governmental audit requirements.
Government Audit Standards define three types of engagements:
financial audits, attest engagements, and performance audits.
A government internal audit function is presumed to be free from organizational independence impairments for reporting internally when the head of the organization:
Is removed from political pressures to conduct audits objectively, without fear of political reprisal.
Generally accepted government auditing standards specifically include all of the following ethics principles except:
Generally Accepted Government Audit Standards ethics do not include a specific reference to fraud detection. Ethics, as defined by GAGAS, address the topics of serving the public interest, integrity, objectivity, proper use of government information, resources and positions, and professional behavior.
Professional behavior includes (GAGAS ethics principle)?
an auditor’s honest effort in the performance of professional services in accordance with the relevant technical and professional standards.
The public interest is defined as (GAGAS ethics principle)?
he collective well-being of the community of people and entities served by the auditor. Auditor services should be designed to meet those needs.
Integrity includes auditors (GAGAS ethics principle)?
conducting their work with an attitude that is objective, fact-based, nonpartisan, and non-ideological with regard to the audited entities and users of the auditor’s reports.
Objectivity includes (GAGAS ethics principle)?
independence of mind and appearance when providing audits, maintaining an attitude of impartiality, having intellectual honesty, and being free of conflicts of interest.
The self-review threat is the threat that?
n auditor or audit organization that has provided nonaudit services will not appropriately evaluate the results of previous judgments made or services performed as part of the nonaudit services when forming a judgment significant to an audit. The failure to evaluate the fairness of the data used for the actuarial valuation and the reasonableness of the liability valuation itself represents a self-review threat.
The self-interest threat is the threat that ?
a financial or other interest will inappropriately influence an auditor’s judgment or behavior.
Familiarity threat is the threat that?
aspects of a relationship with management or personnel of an audited entity, such as a close or long relationship, or that of an immediate or close family member, will lead an auditor to take a position that is not objective.
Management participation threat is the threat that?
results from an auditor’s taking on the role of management or otherwise performing management functions on behalf of the entity undergoing an audit.
A critical component of the determination of whether providing a nonaudit service would create a threat to independence is?
consideration of management’s ability to effectively oversee the nonaudit service to be performed.
In accordance with Office of Management and Budget audit requirements for audits of non-Federal entities expending Federal awards, which of the following statements is accurate regarding Federal awards expended?
Free rents received as part of an award to carry out a federal program are treated as federal funds expended.
The six interrelated elements of quality control are:
human resources, engagement/client acceptance and continuance, leadership responsibilities, performance of the engagement, monitoring, and ethical requirements.
