Day 14 Flashcards
Equation: Days Sales in Accounts Receivable
= Ending A/R / (Sales / 365)
What type of engagement: Assemble FS of a Nonissuer based on the assumptions of the entity’s MGMT without expressing any assurance
Compilation - SSARS
Define a dual purpose test?
Tests of controls and Tests of details performed on the same transaction at the same time
The client has a going concern in year 4 FS. In year 5, the going concern has been eliminated. What should the auditor include in year 5 FS presented in comparative form?
The going concern section on year 4’s report should not be repeated and no description or plans for recovery need be included.
MCQ-15206
Sampling:
MCQ-02582
MCQ-02580
Equation: Quick Ratio
Current Assets (Excluding Inventory & Prepaids) / Current Liabilities
When do you issue a disclaimer of opinion?
Scope limitation
A material weakness exists. What opinion is issued?
Adverse
Inherent risk and control risk differ from detection risk in that they:
Exist independently of the FS audit
A practitioner may perform an agreed-
upon procedures engagement on
projected financial statements
provided that which of the following is
met?
The projected FS include a summary of significant assumptions
When assessing internal Auditors objectivity, the auditor should:
Consider policies that prohibit internal auditors from auditing areas where they were recently assigned
Equipment acquisitions that are misclassified as maintenance expense most likely would be detected by what internal control?
Investigations of variances in a formal budgeting system
What should a standard compilation report on FS of a Nonissuer that omits substantially all disclosures include?
- Includes a disclaimer that the accountant does not express an opinion
- Include a paragraph disclosing such omissions
- Include a disclaimer of opinion
- State that of the omitted disclosures were included, they might influence the users conclusions
Define: Partial Presentation
Presentation of prospective financial information that is not appropriate for general use because it omits one or more of these elements:
- Sales or gross revenue
- Gross profit or cost of sales
- Unusual or infrequently occurring items
- Provisions for income taxes
- Discontinued operations
- Income from continuing operations
- Net income
- Earnings per share
- Significant changes in financial position
True or False: In accordance with GAGAS, Auditors should report identified or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements that have a MATERIAL effect on the FS.
TRUE
MCQ-08952
