Fresh Start... SERIOUSLY! Flashcards
Statements on Standards for Attestation Engagements
Audit- Opinion Issued (Positive Assurance)- Reasonable Assurance
Examination- Ex/ Examine I/C at service org, examine info OTHER THAN historical F/S- Opinion Issued
Review - Of interim F/S of issuer- Conclusion Issued (Negative Assurance)
Agreed-upon Procedures - Issue findings (no assurance)- Ex/ Verifying cash bal on bank statements. Checking security balances
Audit Assertions
Completeness (tracing)- Confirming supporting docs to accounting records. “tracing info to the final info to make sure all is there”
Existence/Occurance(vouching)- From accting records to supporting doc. “vouching the accting records come from info that actually exists”
COCA-CURVE
Completeness- All Transactions recorded
Occurrence- Recorded Events have occurred
Cutoff- Transactions recorded in correct period
Accuracy- Data recorded correctly
Classification- Transactions recorded in correct accounts
Understandability- Disclosures are clear
Rights and obligations- Entity has the rights to assets and the obligations for liabilities
Valuation and allocation- Financial Info allocated and valued correctly
Existence- Evidence that assets, liabilities and equity exist
What is the auditor in a GAGAS engagement required to have in audit report?
Required to describe scope of testing of I/C & Entity compliance w/ laws, regulations, contracts and grants.
Significant discrepancies are included in audit report.
Quality Control Elements
HEAL-ME
Human Resources- Employees are competent/well trained
Qualified employees selected for advanced
placement.
Ethical Requirements- Firm complies w/ ethical requirements
Acceptance and continuance- Firm has resources to perform
engagement.
Firm doesn’t associate w/ clients that lack
integrity.
Leadership responsibilities for quality- Ppl w/ responsibility for
quality control has sufficient and appropriate
experience and authority.
Monitoring- Firm policies are relevant, adequate & operating
effectively.
Engagement performance- Engagements meet professional/quality
standards and legal and regulatory requirements.
What is a cognizant agency
A federal agency that has primary responsibility for a non federal entity.
If a non fed entity (think state govt) spends over $50M/year in fed awards, they need to have a cognizant agency audit
The fed agency that gave the most money will usually do it.
What is an Engagement Letter and what is required to be in it or also allowed
The written agreement between the auditor and client detailing what the engagement is and everyone’s responsibility.
REQ
Auditor and mgmt responsibility
Possibility that we may miss a MM
Applicable financial reporting framework
Expected form/content in audit report
Also allowed
Info on involvement of specialist, other auditors or IA
Arrangement w/predecessors
Any additional services
Sarbanes Oxley prohibited services
Bookkeeping services
Appraisal Services
Management Functions
Statements on standards for Accounting and Review Services
Reviews- Provide limited (negative) assurance about if any material modifications are needed in the F/S to adhere to applicable reporting framework
Compilations
Preparations
