Module A, B, C Class Notes Flashcards
What are compilations of these companies?
Trial balances
Who has compilations?
Small companies
What does the accountant do to a company’s compilation?
Turns it into financial statements
Interim financial statements
Statements before year end for shorter period of time
Ex. Quarterly statements
Report of financial element is similar to…
An auditor’s report
Factor
Sell receivables at discount immediately for cash
An audit is a type of…
Attestation
Not all attestations are…
Audits
2 phrases for a negative assurance
“We are not aware of”
“Nothing came to our attention”
If you give more assurance you must…
Get more evidence
Auditing standards board promulgates…
Attestation standards
Financial projection
Occurrence of one or more hypothetical events
Capital budget example
Need to budget for replacing furniture, carpet, technology
Financial forecasts
Expected conditions and courses of action
Pro forma
Reporting “as if” transaction already occurred
With private company a client can ask auditor…
To issue report on internal control
Debt compliance letter
Requirement to the debtor from the creditor
What statement includes info on audit fees and related services?
Proxy statement
What 3 procedures are conducted in an audit that aren’t usually conducted in a review?
1 test controls
2 substantive procedures
3 test details
First 3 words in a: review report
“We have reviewed”
First 3 words in a: audit report
“We have audited”
First 3 words in a: compilation report
“We have compiled”
Who sets rules for CPAs?
PEEC
PCAOB
What’s an unacceptable answer from a client employee?
Because it’s in the work paper
