Day 6 Flashcards
Relationship: expected population deviation rate vs sample size
Direct relationship
Issuer: requirements of financial expert on audit committee
- Prior involvement as principal financial officer, principal accounting officer, controller, public accountant, or one who actively supervises or assess performance of one of these jobs.
Serving on a prior audit committee DOES NOT = financial expert
Independence Rule of the Code of Professional Conduct - closest past due pmt
Independence = impaired when the client is past due by more than 1 year
AICPA: when can an accountant accept a contingency fee
When representing the client in an IRS examination/court
When will Test of the Operating Effectiveness of Controls be Required?
- the Risk Assessment includes an explanation of the effectiveness over compliance.
- Substantive procedures do not provide enough evidence
- Tests of controls are required by the government
What stmt is included in a nonissuer’s review report.
a review is substantially less in scope than an audit
Self-Review Threat
a threat that an auditor or audit org. has provided non-audit services
Bias Threat
a threat that a political, ideological, social or other convictions
Undue Influence Threat
a threat that external influences or pressures will impact the auditor
Structural Threat
a threat that an audit org. place within a government entity, in combination with the structure of the government entity being audited will impact the auditor
What Assertion: evaluating the adequacy of the allowance for doubtful accounts, the auditor reviews the aging of receivables
Valuation and Allocation
Define: Mean-per-Unit Estimation
uses the average value of the items in the sample to estimate the true population value
Stratified sampling
reduces the variability among items in a stratum
Stratified Mean-per-Unit sampling
produces an estimate having a desires level of precision with a smaller sample size
Assertions: Payroll Accrual - Completeness
performing the search for unrecorded liabilities
