Day 20 Flashcards
What type of engagement is a Preparation Engagement?
Non-Attest:
- Not required to determine if the accountant is independent
MCQ-15015
How is the paragraph formatted for an Examination of a Financial Projection and what type of engagement is this?
Agreed-Upon-Procedures
- A description of the hypothetical assumption used in the first paragraph
- A description of the purpose in the first paragraph
- A reference to the hypothetical assumption in the 3rd & 4th paragraph
- A paragraph restricting the use of the report
MCQ-02436
Key Categories of Performance Audits - GAGAS:
- Effectiveness, Economy, and Efficiency
- Internal Control
- Compliance
- Prospective Analysis
MCQ-06036
When should the auditor of an issuer add an Explanatory paragraph according to the PCAOB?
- The required information is omitted
- There are material departures from the prescribed guidelines
- The auditor is unable to complete the prescribed procedures
- There are unresolved doubts about the conformance of the required supplementary information
MCQ-15017
Define: Control Risk
Is the risk that material misstatement could occur in an assertion and it will not be prevented or detected by the client’s internal control.
MCQ-02435
Control Risk should be assed in terms of:
Financial Statement Assertions
MCQ-02435
What does a Review of a public entity’s Interim Financials and a Review of the Unaudited Financials of a Nonissuer have in common?
- Interim Review requires communication with predecessor auditor - Nonissuer does not
- Interim Review requires an evaluation of Internal Controls - Nonissuer does not
- Interim Review’s guidance is issued by the PCAOB - Nonissuer is the AICPA
MCQ-04941
Name the three types of Examination and Review Engagements:
- Assertion-Based Examination - Positive Assurance
- Direct Examination - Reasonable Assurance
- Review - Limited Assurance
MCQ-00180
Define: Service Auditor’s Type 1 Report
A report on the design and implementation of a Service Organization’s Controls DOES NOT provide assurance on OPERATING EFFECTIVENESS
1. Mgmt’s description
2. Written assertion by Mgmt:
- Mgmt’s description of the Service Organization System “fairly presents and implementation of the system”
- “Suitably designed to achieve the control objectives”
3. The Auditor’s Opinion
MCQ-14639
Name the Factors that may indicate Significant Risks:
- Risk of fraud
- Significant recent Economic, Accounting, or other Developments
- Related Party transactions
- Improper Revenue Recognition
- Nonroutine, Unusual, or Complex Transactions
- Accounting Estimates or other subjective financial measurements
- Noncompliance with laws or regulations
- Accounting principals that are subject to different interpretations
MCQ-07587
What department should approve the proper authorization of write-offs of uncollectible accounts?
Treasure
MCQ-04406
Define: Presumptively Mandatory
Should
MCQ-15774
What service does not need to be pre-approved by the audit committee of an issuer?
Non-Audit services that do not exceed 5% of total revenues.
Services do need to be brought to the audit committee’s attention and approved *before the completion of the audit*
MCQ-06115
Name Attestation Services:
1. Agreed-Upon Procedures
2. Prospective FS (Examination, Preparation, Compilation, Agreed-Upon Procedures)
3. Pro Forma FS (Examination, Review, Agreed-Upon Procedures)
4. Compliance (Examination, Agreed-Upon Procedures)
5. MD&A (Examination, Review)
6. Service Organizations (Examination)
MCQ-04744
Define: Attribute Sampling
Steps for testing of controls
MCQ-07163
