Mnemonics

Question 1

RODISIP = 7 principles of professional conduct of the AICPA code of conduct

Answer 1

R = Responsibility principle
O = Objectivity
D = Due care
I = Independence
S = Scope and Nature of services
I = Integrity
P = Public interest

Question 2

CARE = Balance Sheet Assertions

Answer 2

C = Completeness
A = Allocation and valuation
R = Rights and obligations
E = Existence

Question 3

COCCA = Income Statement Assertions

Answer 3

C = Completeness
O = Occurrence
C = Cutoff
C = Classification - proper account
A = Accuracy and valuation - proper amount.

Question 4

O3I = Basic Ethical Characteristics and Professional Qualities

Answer 4

O = Objectivity
I = Independence
I = Integrity
I = Impartiality

Question 5

MECCO = Auditors Responsibilities

Answer 5

M = Maintain professional skepticism
E = Exercising professional judgment through planning and performance audit
C = Complying with relevant ethical requirements.
C = Complying with GAAS
O = Obtaining sufficient appropriate audit evidence

Question 6

EPIDO = Steps to obtain reasonable assurance

Answer 6

E = Expressing an opinion on F/S based on the audit
P = Plan the work and properly supervise assistants
I = Identify and assess risk of material misstatement whether due to fraud or error
D = Determine and apply appropriate materiality levels
O = Obtain sufficient appropriate audit evidence

Question 7

PAD = CAM info that should be included in the auditor’s report

Answer 7

P = Principal factors that led the auditor to determine that this was a CAM
A = How the CAM was Addressed
D = Reference to relevant F/S accounts and Disclosures.

Question 8

TAABSKMAOOSAD = Parts and Order of Auditor’s Report
Tutankamon

Answer 8

T = Title
A = Addressee
A = Auditor’s opinion
B = Basis for Opinion
S = Substantial doubt about going concern
K = Key Audit Matters
M = Management Responsibilities
A = Auditor’s responsibilities
O = Other info
O = Other Reporting Responsibilities
SAD = Signature, Address, and Date

Question 9

PRIME = Auditor’s responsibilities for subsequent events

Answer 9

P = Post B/S transaction
R = Representation letter
I = Inquiry (lawsuits, claims, etc.)
M = Minutes of meetings
E = Examine latest interim F/S

Question 10

DROCO = Responsibilities of a previous auditor when deciding to reissue their prior report.

Answer 10

D = Date the report as appropriate (dual dated or unrevised)
R = Read the CY report
O = Obtain a letter of representation of new auditor
C = Compare CY to PY
O = Obtain a letter of representation from client’s management at the date of reissuance.

Question 11

HELPME = Elements of Quality Control

Answer 11

H = Human Resources
E = Engagement/Client acceptance
L = Leadership responsibility
P = Performance of the engagement
M = Monitoring
E = Ethical requirements

Question 12

RORRIS = REQUIRED content of engagement letter

Answer 12

R = Reference to the expected form and content of any report, and that these may be subject to change
O = Objective and scope of the audit
R = Responsibilities of the auditor
R = Responsibilities of management
I = Identification of Financial Framework
S = State that there is unavoidable risk that some material misstatements may not be detected

Question 13

COVERUP = 6 main financial assertions

Answer 13

C = Completeness
O = Cut Off
V = Valuation, allocation and accuracy
E = Existence and Occurrence
R = Rights and obligations
U = Understandability of …
P = Presentation and Classification

Question 14

CRIME = 5 components of internal control

Answer 14

C = Control Environment
R = Risk Assessment
I = Information and communication systems
M = Monitoring
E = Existing control activities

Question 15

PAID TIPS = Control activities in a strong system of internal controls

Answer 15

P = Pre-numbering docs
A = Authorization of transactions
I = Independent checks to maintain asset accountability
D = Documentation
T = Timely and financial performance reviews
I = Information processing controls
P = Physical controls for safeguarding assets
S = Segregation of duties

Question 16

MCCHAPO = 7 Control Environment Factors

Answer 16

M = Management’s philosophy and operating style
C = Communication and enforcement of integrity and ethical values
C = Commitment to competence
H = HR policies and practices
A = Assignment of authority
P = Participation of those charged with governance
O = Org structure

Question 17

HTM = Hija de Tu Made = Obtaining an understanding of an entity’s information and communication system

Answer 17

To understand:
H = How transaction are initiated, processed, reported
T = The financial reporting process
M = Means used by an entity to communicate financial reporting roles and responsibilities

Question 18

POA = 3 Fraud Risk Factors

Answer 18

P = Pressures/incentives
O = Opportunity
A = Attitude/Rationalization

Question 19

CECH = 4 factors of high inherent risk

Answer 19

C = Complex calculation
E = Estimates
C = Cash
H = High-volume transactions

Question 20

NET = 3 elements of substantive testing

Answer 20

N = Nature
E = Extent
T = Timing

Question 21

RORI = procedures used to test operating effectiveness of internal controls

Answer 21

R = Recalculation
O = Observation
R = Reperformance
I = Inquiry

Question 22

FINE = Factors that may indicate substantial doubt about an entity’s ability to continue as a going concern

Answer 22

F = Financial difficulties
I = Internal matters
N = Negative trends
E = External matters

Question 23

FARMPC = SSAE Attestation Services

Answer 23

F = Forecast
A = Agreed-upon procedures
R = Reporting on controls
M = MD&A
P = ProForma F/S
C = Compliance (examination or agreed-upon procedures only)

Question 24

I AM SURE = Conditions for AUP

Answer 24

I = Independence
A = Agreement of the parties
M = Measurability and consistency
S = Sufficiency of the procedures
U = Use of the report: Gral or certain ppl
R = Responsibility of the subject matter.
E = Engagement to perform AUP on prospective F/S

Question 25

PECO = appropriate reliability of audit evidence

Answer 25

P = Personal knowledge (performs examination, inspection, or recalculation) - (most reliable)
E = External Source (e.g., bank confirmations, receivable confirmations)
C = Client Evidence (auditor’s consideration of data developed under an adequate system of internal controls)
O = Oral client evidence (inquiry) - (less reliable)

Question 26

RISIG = Elements related to the Pre-acceptance phase of engagement

Answer 26

R = Reporting - Firm’s ability to meet reporting deadlines
I = Independence
S = Staff - Firm’s ability to staff the engagement
I = Integrity of Client Management
G = Group Audit

Question 27

SITA COMADRE KFA = OTHER content of engagement letter

Answer 27

S = scope of audit (reference to legislation, regulations, GAAS, or ethical requirements)
I = Information about subsequent events
T = Timely disclosure of relevant info related to F/S
A = Audit planning and performance (composition of audit team)

C = Communications about results of audit engagement
O = Other auditors’ involvement (e.g., specialists, internal auditors, or other staff of the entity (technology)
M = Management’s receipt of engagement letter (management’s signature)
A = Arrangements with predecessor auditor
D = Obligation to provide audit Documentation to other parties
R = Restrictions on the auditor’s liability (when no prohibited)
E = Expectation to receive written representation from management

K = Key audit matters communication
F = Fees and billing arrangements
A = Additional services provided

Question 28

ADMITS = Procedures to point going concern issues

Answer 28

A = Analytical procedures (negative trends/adverse financial ratios) or attorney’s letters for pending litigation
D = Debt compliance (violation of debt covenant requirements)
M = Minutes of the Board of Directors Meetings
I = Inquiries of management regarding whether they evaluated going concern
T = Talk to 3rd parties offering financial support
S = Subsequent events - Uninsured disasters

Question 29

ECO = Inherent limitations of Internal Controls

Answer 29

E = Error, Human error (errors in design or use of automated controls)
C = Collusion (circumvention of controls by two or more employees)
O = Override (Mgmt. override of controls)

Question 30

SIPPO = Ethical principles under GAGAS

Answer 30

S = Serving the public interests
I = Integrity
P = Proper use of Government information, resources, and positions
P = Professional Behavior
O = Objectivity

Question 31

ARC = Functions covered under segregation of duties

Answer 31

A = Authorization
R = Recordkeeping
C = Custody of related assets

Question 32

CODA = Final paragraph of nonissuer audit report

Answer 32

C = City and state where report is issued
O = Other information (auditor/mgmt responsibilities)
D = Date of report
A = Audit Firm signature

Question 33

GADOMIS = Auditor’s report on compliance under GAGAS

Answer 33

G = GAGAS and GAAS compliance
A = Audit’s design to provide reasonable assurance of detecting instances of non-compliance
D = Distinguish b/w general and specific requirements
O = No Opinion on overall compliance with laws and regulations
M = Management’s responsibility to comply with laws and regulations
I = Illegal acts reporting (“criminal prosecution” and “more than inconsequential”)
S = Scope of testing of internal controls over compliance and testing results (deficiencies and material weaknesses)

Question 34

SAPITO ROSADA = Elements of AUP report

Answer 34

S = Statement stating CPA’s independence and meets ethical requirements.
A = Addressee
P = Procedures and findings description, no assurance
I = Identification of engaging party
T = Title include word Independent
O = No Opinion/conclusion rendered

R = Relevant subject matter - F/S, forecast, projections
O = Practitioner’s Office city and state
S = Signature of CPA firm
A = AICPA SSAE standards
D = Date of report
A = Alert to restrict