Final Review Flashcards
what speciality framework should be restricited and documented in the other matters paragraph
contractual basis
when is an emphasis of matter required
- to describe a justified change in accounting principal that has material effect
- subsequent discovered facts lead to a change in audit opinion
- FS are prepared in accordance with a special purpose framework
optional EoM - uncertainty about litigation or regulatory action
- major catastrophe have significant effect
- significant related parties
- unusually important subsequent events
- substantial doubt about ongoing concern but have been allivated
what should materiality level be based on
the smallest level of misstatement that could be material to any one of the financial statements
if tolerable misstatement goes down what happens to likelihood of uncorrected and undetected misstatements
they will go up
what are inherent risk factors
complexity
change
subjectivity
uncertainty
susceptibility to mgt bias
in every audit what risk ar presumptionalty exist
improper revenue recognition and mgt override of contorls
what are the elements of quality control?
HELP ME
Human resources
engagement/client acceptance and continuance
leadership responsibilities
performance of the engagement
monitoring
ethical requirements
where does profit maximization occur?
Marginal revenue = marginal costs
What is managements responsibility in regards to fair vaule in an audit
mgt is responsible for making fair value measurements and disclosing them in accordance to with GAAP
how should an attorney letter be created and sent
the client should prepare the letter and the CPA firm should mail the letter
what is attribute sampling used for
to sample for test of controls
what is variable sampling used for
to test for substantive testing
when should you use a statified sampel
when there is a lot of variation in a population
