F5 Flashcards

1
Q

Under the Sarbanes-Oxley Act of 2002

A

the chief executive officer is required to certify (or sign off) on all the other items, but is not required to certify the financial expertise of the audit committee.

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2
Q

entity-level control

A

include controls related to the control environment, the risk assessment process, and the policies over risk management practices.

These affect the company as a whole not just a specific sector for example the controls on the completeness of deposited cash this would not be an entity control as it focuses on a singular account

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3
Q

Material weakness

A

Is the only one that would lead to an adverse opinion

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4
Q

disclaimer of opinion arises from

A

Restrictions on the scope of the engagement (Scope limitation)

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5
Q

adverse opinion arises from

A

Identification of a material weakness

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6
Q

Failure of management to provide a written representation letter acknowledging its responsibility for the effectiveness of internal control generally will result in

A

a disclaimer of opinion or withdrawal from the engagement.

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7
Q

An engagement to report on whether a previously reported internal control weakness continues to exis

A

Is voluntary

does not have to comply with any professional standards for example PCAOB or GAAS

Requires a written report from the company management to the Auditors

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8
Q

Scope

A

Uses the NET of things
Nature
Extent
Timing

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9
Q

SSAE involves

A

Establiceghd by the AICPA and addresses information for Attestation services of

Agreed upon procedures
Financial forecast and projection
Pro forma FS
Compliance
Management’s discussion and analysis (MD&A)
Reporting on controls at a service organization

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10
Q

The consistency assertion in an MD&A presentation addresses

A

whether nonfinancial data has been accurately derived from related records.

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11
Q

The occurrence assertion in MD&A addresses whether

A

reported transactions or events have occurred during a given period.

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12
Q

The presentation and disclosure assertion in MD&A addresses whether

A

information included in the MD&A presentation is properly classified, described, and disclosed.

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13
Q

The completeness assertion in MD&A addresses whether

A

descriptions of transactions and events necessary to obtain an understanding of the entity’s financial condition are appropriately included in the MD&A presentation

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14
Q

Financial forecast

A

Expected results

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15
Q

Financial projection

A

Hypothetical assumption

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16
Q

Prospective FS can be used by

A

You can pick between General Use or Limited Use

General Use (Financial Forecast)(Expected results) Implies that it will be used by parties not negotiating with the issuing company (For example sales pitch)

Limited Used FS (Financial projection)(Hypothetical assumption) will only be used by the issuing company and the people negotiating directly with them (for example a bank/lender) someone that is being negotiated with directly

17
Q

Adverse in porspective FS

A

No reasonable basis

18
Q

Disclaimer in prospective FS

A

Unable to preform reasonable procedures

19
Q
A