Memory Aids Flashcards
(32 cards)
What are the 10 GAAS?
TIPPICANOE:
3 General Stds: Training & Proficiency; Independence; Prof. Care, Due
3 Fieldwork Stds: Planning & Supervision; Internal Controls; Corroborative Audit Evidence
4 Reporting Stds: Accting Principles in conformity w/GAAP; No new accting principles applied-Consistency; Omitted Informative Disclosures-None; Expression of an Opinion
What Attestation Engagements must you be independent for?
ERAS: Examinations (Audits) Reviews Agree-Upon procedure engagements Special Reports
What type of engagements do you NOT need to be independent for?
Compilations (must indicate lack of independence)
Taxes
Consultations
What kind of financial interests will impair your independence?
Material Indirect
and/or
Any Direct
What inquiries should be made of the predecessor auditor?
RIDC Reasons for change Integrity of Mgt Disagreements during audit Communication w/Mgt or those charged with gov.
What matters should be communicated with those charged with governance?
DISAPPROVE: Disagreement w/mgt Illegal acts Significant accting policies Adjustments Prior discussions w/ mgt Problems obtaining evidence or emp. cooperation Responsibilities of auditor Other info reg. responsibilities Views of other acctants Estimates
What are the elements of the engagement letter?
FACSIMILE: Fees Auditor's responsibility (GAAS) Confirmation of engagement Scope & objective of engagement Internal Control Mgt responsibility Irregularities-Fraud iLlegal Acts Errors
What are the steps in planning an audit?
BRAINSTOPS: Basic discussion w/client Review of audit docs (prev audits) Ask about recent developments Interim F/S Non-audit personnel Staffing Timing Outside asst (specialist) Pronouncements (changes in A. Proc. & A. Stds) Scheduling with the client
What are the 6 element of quality control?
HEALME
Human resources (Personnel mgt)
Ethical Req. (Independence)
Acceptance and continuance of client rel. & specific eng.
Leadership resp. for quality w/i the firm
Monitoring
Engagement performance
What are the objectives that Internal Control should meet?
ACE
Accurate & Reliable fin. reporting
Compliance with laws & regs
Effectiveness and efficiency of ops
What are the 5 elements of Internal Control?
CRIME Control activities Risk assessment Information & communication Monitoring Control Environment
What are the 7 elements of Control Environment?
CHOPPER Commitment to competence Human resource policies & practices Organizational structure Participation of those charged w/gov Philosophy of mgt & operating style Ethical values & integrity Responsibility assignment
What are the elements of Control Activities?
PIPS & ARCC Performance reviews Information processing Physical controls Segregation of duties: Authorization Recording (posting) Custody Comparison
What ways can you document your understanding of Internal Control?
FIND Flowchart Internal Control Questionnaire (ICQ) Narrative or Memorandum Decision tree/table
How do you test for segregation of duties (ARCC)?
RIIO Reperformance Inspection Inquiry Observation
What are the inherent limitations:
COCO Collusion Override by mgt Competence Obsolescence
What are Managements Assertions?
UPERCV Understandability & Classification Presentation & Disclosure Existence or Occurrence (Vouching) Rights & Obligations Completeness (Tracing) & Cutoff Valuation, Allocation, & Accuracy
What are the Audit Procedures?
ICORRIIA Inquiry Confirmation Observation Recalculation Re-performance Inspection of tangible assets Inspection (examination) of records/documents Analytical Procedures
What are the 6 types of Internal Control Activities to question?
PRAISE Physical control Recording Authorization Independent checks Segregation of duties Evaluate performance
What is Sufficiency?
Quantity
Persuasive rather than conclusive
Cost/benefit
What is Appropriateness?
Quality Relevance (UPERCV) Reliability/Faithful Representation Sources: 1. Auditor developed 2. Outside 3. Outside/Inside 4. Inside
What are 5 comparisons in Analytical Procedures?
CRAFT Client vs Industry Related Accts Actual vs Budget Financial vs Nonfinancial This year vs Prior year
What 3 times may Analytical Procedures be performed?
Planning (required) Substantive testing (optional) Overall Review (required)
What is the current ratio?
current assets/current liabilities
