Components

Question 1

Who can be a component auditor?

Answer 1

apart of the group engagement firm, a network-affiliated firm, and another unrelated firm

Question 2

How does the component auditor determine materiality?

Answer 2

the group engagement team is resp for determining materiality levels

Question 3

What is an emphasis of matter paragraph?

Answer 3

a matter that is of such importance that it is fundamental to users’ understanding of the FS

Question 4

When does one put an EOM paragraph?

Answer 4

Doubts about going concern.
Inconsistency of acct principles.
When the FS are prepared in accordance with special purpose frameworks. uncertain litigation outcome. Major catastrophe. Sig tranx with related parties. Unusually important subsequent events

Question 5

Other matter paragraph

Answer 5

refers to matters other than those presented or disclosed in the FS that is relevant to users understanding of the audit, the auditors resp or the report

Question 6

Qualified opinion

Answer 6

expresses reservation but taken as a whole, the FSs are still fairly stated.

Question 7

What do you add to the report for a qualified opinion?

Answer 7

A Basis for Qualified Opinion paragraph with heading before the opinion paragraph.

Question 8

What should the opinion paragraph say for a qualified opinion.

Answer 8

Except for..

Question 9

Does the auditor resp section change for a Qualified opinion?

Answer 9

Yes - last sentence. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.

Question 10

What type of opinion should be issued for a scope limitation?

Answer 10

Qualified or disclaimer

Question 11

a Qualified opinion may be issued for…

Answer 11

a scope limitation or a GAAP departure (unjustified acct change)

Question 12

When to issue an adverse opinion

Answer 12

when FS misstatements are both material and pervasive (FS are NOT fairly stated)

Question 13

Disclaimer

Answer 13

Auditor did not obtain sufficient approp. audit evidence and the possible effects could be material and pervasive. (means - no conclusion is expressed)

Question 14

What would a successor auditor ask a predecessor AFTER accepting the engagement?

Answer 14

matters that may facilitate the evaluation of financial reporting consistency between the current and prior years

Question 15

Auditor can express an opinion on supplementary info if the FS received a ___ opinion

Answer 15

Qualified. But if it’s adverse or disclaimer, cannot express opinion on supplementary

Question 16

What happens to the report when required supplementary information is presented?

Answer 16

an Other matter paragraph is added to the report (whether the info is properly presented or not)

Question 17

What is the auditors requirements regarding required supplementary info?

Answer 17

Add an other matter paragraph to the report and apply limited procedures to the info. And report deficiencies in, or omissions of, such info

Question 18

When required supplementary info is included, the auditor is required to perform the following procedures:

Answer 18

inwuire of mgmt regarding the methods of preparing the info and whether the methods have changed.
Significant assumptions
compare the info for consistency with mgmt’s responses, the FS, and other knowledge obtained during the audit.
Obtain additional representations in the MRL

Question 19

what kind of opinion should an auditor give if mgmt declines to present the A with required supplementary info?

Answer 19

Unmodified with an other matter paragraph

Question 20

Where is an alert mentioned?

Answer 20

A paragraph/sentence at the end of the auditors report - The purpose of this report is soley to ___. accordingly this report is not suitable for any other purpose.

Question 21

When is an alert required?

Answer 21

The subject matter is based on criteria that are only suitable or available to a limited number of users
When the matters are presented in a by-product report that is not the primary objective of the engagement

Question 22

What is the purpose of an alert?

Answer 22

to reduce the potential for misunderstanding if the auditors report is taken out of context for which the written communication is intended.

Question 23

If mgmt refuses to revise other info containing material inconsistencies prior to the report release date, the auditor may…

Answer 23

include an other matter paragraph to address the material inconsistencies

Question 24

If the AFS contain an adverse opinion or disclaimer

Answer 24

do not express an opinion on the summary FS

Question 25

What are summary FS?

Answer 25

Historical Financial info that is derived from the FS but contains less detail than the FS while still providing a structured representation consistent with that provided by the FS

Question 26

What should an auditors report on condensed FS indicate?

Answer 26

The A has audited and expressed an opinion on the complete FS.
The date of the report on such statements.
The type of opinion expressed.
Whether the info in the condensed FS is consistent in all material respects with the audited FS.

Question 27

Interim FS

Answer 27

Financial info prepared and presented in accordance with an applicable financial reporting framework that comprises either a complete or condensed set of FS covering a period less than on full year or covering a 12m period ending on a date other than the entitys fiscal YE

Question 28

Special purpose framework

Answer 28

a financial reporting framework other than GAAP that is one of the following bases of accounting: cash basis, tax basis, regulatory basis, contractual basis

Question 29

Special purpose framework adds what to the report?

Answer 29

EOM paragraph.
REfers to the note describing the basis used.
Point out that the basis is other than GAAP.

Question 30

When an auditor is engaged to audit a specific element of the FS, selected financial data, in conjunction with an engagement to audit the FS,

Answer 30

the report on the specific element should incldue the data of the audit report on the FS and the type of opinion expressed.

Question 31

The service auditor may issue a report on either….

Answer 31

the adequacy of the design of internal control or the operating effectiveness of internal control