Ethics and Assessing Risk Flashcards
When audit fees of the previous year aren’t paid, how can the auditor avoid an impairment of independence?
The auditor can start the fieldwork BUT the auditor cannot issue the current report until the previous year’s fees are paid.
What is the rule for CPA’s hiring specialists?
A CPA may hire for the CPA’s public accounting firm a non-CPA systems analyst who specializes in developing computer systems, provided that the CPA can supervise the specialist and evaluate his/her work. The CPA should be able to define the tasks to be performed and evaluate the end product
What types of risks can be assessed in quantitative and qualitative terms?
ALL RISKS
What type of report is required to be restricted for use?
Agreed Upon Procedures
The authoritative body designated to promulgate standards concerning an accountant’s association with unaudited financial statements of an entity that is not required to file financial statements with an agency regulating the issuance of the entity’s securities is the….
The standards that address unaudited financial statements are the Statements on Standards for Accounting and Review Services.
These standards are issued by the AICPA’s Accounting and Review Services Committee.
Reports are considered special reports when issued in conjunction with…
Special reports apply to engagements that involve compliance with contracts or regulatory requirements related to financial statements.
What is the difference between a financial forecast and a financial projection?
Attestation professional standards indicate that while financial forecasts are appropriate for general use, financial projections (which include a hypothetical assumption, often on a proposed transaction) are limited-use documents.
A material weakness that exists at year-end may result in what type of audit opinion when conducting an audit of a public company’s internal control?
PCAOB internal control audits require a report with an adverse opinion in such a case, not a qualified opinion.
What type of tests are performed in review engagements?
The limited procedures performed in a review are inquiry and analytical procedures.
Detailed tests are not performed in a review engagement.
What does the Department of Labor conduct their audits in accordance with?
Government Auditing Standards
Analytical procedures performed near the end of an audit generally would include….?
- the adequacy of evidence gathered in response to unexpected balance
- unusual or unexpected balances or relationships that were not previously identified.
