MISC Flashcards
1
Q
General Standards
A
- competence
- due care
- independence/objectivity
2
Q
CAS examination standards
A
- conduct audit based on CAS
- audit procedure should be in line with scope
- obtain assurance of F/S being free of material un/intentional error
- audit should reduce risk level to acceptably low
3
Q
reporting standards
A
- identify F/S
- distinguish responsibility of auditor and management
- ensure report follows the appropriate format
4
Q
professional responsibilities
A
- maintain the respect and confidence of general public
- distinguish profession from general public
- maintain order in the profession
- provide means of self policing the profession
5
Q
fundamental principles on how a member should act
A
- act to maintain professional reputation
- use due care and maintain competence
- independent in fact and appearance
- preserve client confidentiality
- practice is based on professional excellence
- professional courtesy towards other members
6
Q
threats to independence
A
- self-interest
- self-review
- advocacy
- intimidation
- familiarity
7
Q
what does CPAB do
A
- reviews public company audits
- reviews auditors QC system
8
Q
client acceptance decision steps
A
- review draft F/S
- inquire third parties (e.g. creditors)
- inquire previous auditor
- consider unusual business and audit risk
- ensure firm is competent, staffed and client is auditable
- ensure it is legal to audit (require CPA)
9
Q
issues with first time audit
A
- cannot provide assurance on I/S
- COGS will be an issue because beginning balance of inventory is not known
- not a problem for service companies with no inventory
10
Q
three audit plan documents
A
- audit strategy - most general
- audit plant
- audit program - most specific
11
Q
planning workflow of audit
A
- risk assessment
- audit strategy
- planned audit approach
12
Q
considerations in risk assesment
A
- understand the auditee’s business environment, objectives and strategies
- identify risky accounts
13
Q
considerations during audit plan
A
- asses need for specialist
- asses possibility of illegal actions
- preliminary analytical procedures
14
Q
where do analytical procedures occurr
A
- planning stage - required - risk identify
- implementation stage - optional
- conclusion - required - asses the adjustments made
15
Q
steps in analytical procedure
A
- compare F/S with previous years (horizontal analysis)
- compare ratios on a specified base (vertical analysis)
- compare current year to industry
- compare current year to budgeted
