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
Assertions: Payroll Accrual - Valuation and Allocation
recalculate the client’s calculation of the payroll accrual
How would you test the Existence Assertion: Payroll Accrual
Vouch amounts from the client’s calculation to supporting documents
Assertions: Payroll Accrual - Rights and Obligations
examine supporting documents
under GAGAS - reporting on compliance with laws and regulations the report should include what information regarding illegal acts?
Relevant info. regarding material illegal acts and fraud or irregularities found in the course of the audit
Opinion Type: Nonissuer - internal control over financial reporting = Material Weakness exists
Adverse
What stmt should be included in a review report?
a review is substantially less in scope than an audit
