Final Review Flashcards
Control Risk
Hold
Material Weaknesses vs. Significant Deficiencies
For a non-issues, all MW are SD
Emphasis of Matter
After Opinion, refers to going concern (no need to mention one year, already implied)
Audit Report
Should be addressed to whoever engaged auditor
Compilation
NO ASSURANCE
Documentation Completion Date
Existing docs cannot be deleted, must note addition of new docs
Comfort Letters
Addressed to underwriters, negative assurance on F/S
Special Purpose Frameworks
- Cash Basis and Modified Cash Basis
- Tax Basis
- Regulatory Basis
- Contractual Basis
- Other Basis
Analytical Procedures
Non financial Information
Quality Control Standards
- Human Resources
- Engagement/Client Acceptance
- Leadership Responsibilities
- Performance of Engagement
- Monitoring
- Ethical Requirements
Integrated Audit
Must for Issuer, CAN for non
AICPA Code of Professional Conduct
Applies to compilations and reviews
Assess control risk
Reperformance
Ask predecessor
Why change in auditors??
Treasurer
NO billing responsibility & should authorize writing off bad receivables
GAAP Requirement
PPE stated at cost minus depreciation
Supplementary Info
Does NOT affect opinion
GAAP Violation
Qualified or Adverse
Impairs Independence
- Threatened and likely lawsuit
- CC bill over $10k
- Overdue audit bill OVER one year
Specific Audit Objections based on…
Financial Statement Assertions
Agreed Upon Procedures
NO OPINION
PCAOB
2 CPAs & 3 Non-CPAs
FIFO & LIFO
GAAP allows the use of both
SysTrust
Assurance of reliability of any defined computer system
Date of Rep Letter
Same as Audit Report Date
Forecast - OK FOR GENERAL
Projections - NOT OK
Financial Stmt Assertions
- Rights and Obligations
- Valuation and Allocation
- Understandability and Classification
Auditors’ responsibility in evaluating estimates
- Assess Mgmt. practices
- Verify that all material estimates were developed
- Determine acct. estimates reasonable
- Assure estimates are properly recorded & disclosed
Reasonable Assurance
High, but NOT absolute
