Module A, B, C Class Notes

Question 0

What are compilations of these companies?

Answer 0

Trial balances

Question 1

Who has compilations?

Answer 1

Small companies

Question 2

What does the accountant do to a company’s compilation?

Answer 2

Turns it into financial statements

Question 3

Interim financial statements

Answer 3

Statements before year end for shorter period of time

Ex. Quarterly statements

Question 4

Report of financial element is similar to…

Answer 4

An auditor’s report

Question 5

Factor

Answer 5

Sell receivables at discount immediately for cash

Question 6

An audit is a type of…

Answer 6

Attestation

Question 7

Not all attestations are…

Answer 7

Audits

Question 8

2 phrases for a negative assurance

Answer 8

“We are not aware of”

“Nothing came to our attention”

Question 9

If you give more assurance you must…

Answer 9

Get more evidence

Question 10

Auditing standards board promulgates…

Answer 10

Attestation standards

Question 11

Financial projection

Answer 11

Occurrence of one or more hypothetical events

Question 12

Capital budget example

Answer 12

Need to budget for replacing furniture, carpet, technology

Question 13

Financial forecasts

Answer 13

Expected conditions and courses of action

Question 14

Pro forma

Answer 14

Reporting “as if” transaction already occurred

Question 15

With private company a client can ask auditor…

Answer 15

To issue report on internal control

Question 16

Debt compliance letter

Answer 16

Requirement to the debtor from the creditor

Question 17

What statement includes info on audit fees and related services?

Answer 17

Proxy statement

Question 18

What 3 procedures are conducted in an audit that aren’t usually conducted in a review?

Answer 18

1 test controls

2 substantive procedures

3 test details

Question 19

First 3 words in a: review report

Answer 19

“We have reviewed”

Question 20

First 3 words in a: audit report

Answer 20

“We have audited”

Question 21

First 3 words in a: compilation report

Answer 21

“We have compiled”

Question 22

Who sets rules for CPAs?

Answer 22

PEEC

PCAOB

Question 23

What’s an unacceptable answer from a client employee?

Answer 23

Because it’s in the work paper

Question 24

Intentional means materiality…

Answer 24

Goes out the door

Question 25

Under reporting charging for time is an example of…

Answer 25

An ethical decision

Question 26

Auditing standards and Principles are both…

Answer 26

Broad and vague

Question 27

Objectivity

Answer 27

Independence

Question 28

Interpretations (how are they characterized?)

Answer 28

Get more specific

Question 29

Ethical ruling

Answer 29

Most specific explanations

Explains specific cases

Question 30

What’s in place to monitor at big firms?

Answer 30

Self monitored by firm with hotline

Question 31

Self review threat

Answer 31

Shouldn’t audit what you prepared

Ex. Can’t do book keeping services for audit client

Question 32

Mortgage from client, requirement for auditors?

Answer 32

Must be at market rate

Question 33

Which 3 parties do investors sue?

Answer 33

Auditors

Management

Board

Question 34

3 instances when an auditor can reveal confidential info

Answer 34

1 subpoena from court

2 peer review

3 violation of conduct

Question 35

Who would auditors bring in to sue a client?

Answer 35

Audit export on client/industry

Question 36

Significance of Ultramares doctrine

Answer 36

Third parties not in privity with auditor can bring suit

Question 37

Business risk

Answer 37

Risk organization could fail to meet its objectives

Question 38

If a loan is collate riled agains inventory…

Answer 38

Auditors should take a good look at it

Question 39

It is important to report your audit hours…

Answer 39

Honestly and why it took that long

Question 40

Don’t ever sign off on a program step…

Answer 40

You didn’t do