Engagement Planning, Obtaining Understanding, Assessing Risk

Question 1

Management assetions that have a meaningful bearing on whether an account balance, transaction, or disclosure is fairly stated

Answer 1

Relevant assertions

Question 2

Management assertion that all trnasactions/events that are recorded have occurred and all assets/liabilities/equity stated actually exist

Answer 2

Occurence/existence

Question 3

Management assertion that all transactions/assets/liabilities/disclosures have been recorded

Answer 3

Completeness

Question 4

Management assertion that all amounts recorded have been recorded appropriately

Answer 4

Valuation/accuracy

Question 5

Management assertion that trnasactions and events have been recorded in teh correct accounting period

Answer 5

Cutoff

Question 6

Management assertion that transactions and events habe been recorded in the proper accounts and disclosure information is presented and described cleary

Answer 6

Classification

Question 7

The standards and benchmarks used to measure and prsent the subject matter and against which the CPA evaluates the subject matter under AT 101 Attestation Standards

Answer 7

Suitable criteria

Question 8

A type of attest engagement in which teh CPA selects from all available procedures and provides a high level of assurance to limit attestation risk to an appropriately low level

Answer 8

Examination

Question 9

An attest egagement in which the CPA generally limits procedures to inquiries and analytical procedures and rpovides a moderate level of assurance to limit attestation risk to moderate level

Answer 9

Review

Question 10

An attest engagement in whichte CPA is engaged by a client to issue a report of findings based on specific procedures performed on subject matter

Answer 10

Agreed-upon procedures

Question 11

Consists of the risk that an account and its related assertiosn contains mateiral misstatemetns and teh risk theat the auditor will not detect such misstatements

Answer 11

Audit risk

Question 12

Refers tothe likelihood of material misstatement of an assertion, assuming no related internal control

Answer 12

Inherent risk

Question 13

The likelihood that a mateiral misstatement will not be prevented or detected on a timely basis by internal control

Answer 13

Control risk

Question 14

the likelihood that an auditor’s procedures lead to an improper conlcusion that no material misstatement existas in an assertion, when in fact one does
–primarily relies on substantive procedures

Answer 14

Detection risk

Question 15

The magnitude of an omission or misstatement of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would have been changed or influencedby the omission or misttatement

Answer 15

Materiality

Question 16

A description of the nature, timing, and extent of the audit procedures to be performed–oftendocumented with an audit program

Answer 16

Audit plan

Question 17

A detailed listing of the specific audit procedures to be performed in thecourse of an audit engagement–tailored to the risksa nd internal control of each engagement

Answer 17

Audit program

Question 18

Standards on quality control that relate to the CPA firm itself and apply to the auditing and accounting practices that the CPA firm is engaged in

Answer 18

Statements on Quality Control Standards (SQCS)

Question 19

A type of peer reivew that involves peer reviewers’ study and appraisal of a CPA firm’s system of quality control to perform accounting and auditing work; uses inquiry of CPA firm personnel, review of documentation, and selection of a sample of the CPA firm’s engagements for review

• pass rating
• deficiency rating
• rail

Answer 19

System review

Question 20

A type of peer review in which the peer reviewer selects a sample of a CPA firm’s actual accounting work to evaluate whether the reports and procedures are appropriate–availbe only for CPA firms taht do NOT perform audits, but do perform accounting work (reviews/compilations)

Answer 20

Engagement review

Question 21

Used during risk assessment to enhance the auditor’s understanding of the client’s business and significatn transactions and events that have occurred since the prior audit

Answer 21

Analytical procedures