Day 3 Flashcards
What are Entity Level Controls?
- the Control Environment
- MGMT override
- the company’s risk assessment process
- Centralized processing
- Monitoring the results of operations
- Monitoring other controls
- Period end financial reporting
- Risk MGMT practices
SOC 1 Type 1
Help in understanding controls
The report is provided when tests of operating effectiveness was NOT performed
Will NOT reduce Control Risk
SOC 1 Type 2
Provides assurance about the design, implementation, and operating effectiveness of a service organization’s Internal Controls.
Will reduce Control Risk
Name a non-attest engagement
Preparation
Opinion Type: MGMT does not provide justification for an accounting principle change
Adverse
Opinion Type: MGMT refuses auditor to contact legal counsel
Qualified or Disclaimer of Opinion
Opinion Type: FS do not adequately disclose litigation with a probable material loss
Adverse
Reasons for an Emphasis-of-matter ¶
- uncertainty of future outcome, litigation or regulatory
- major catastrophe
- significant related party transactions
- important significant events
The client has a valid reason to deny auditor in selecting specific AR for confirmation. What should the auditor do?
Verify account balances by inspecting clients bank stmts and cash receipts
What do you do before BS date?
Review the detail and test significant M&E & Travel expense accounts
What professional standards apply when a public entity has an audit and a review of interim FS?
PCAOB only
