MyAUD Flashcards
An auditor report should include reference to the country of origin for
accounting principles to prepare FS and auditing standards to perform audit
Does GAAP allows Co. to use dif methods for costing inventory?
Yes, as long as for dif. inventories and disclosed
Where is reference on GAAS made and in GAAP?
GAAS is referred in the Auditors responsibility paragraph and GAAP in the Opinion paragraph
Is recurring working capital shortage an indicative of going concern doubt?
Yes. all negative trends as such
Can an unmodified opinion be express on a material departure from GAAP?
Yes, if departure is justified and properly disclosed
Discussion w/ predecessor prior to accepting a client should include:
mgmt integrity, reasons for changing auditor, disagreement b/w predecessor and mgtm
Is the auditor responsible for specialist assertion?
No. though it should obtain and understanding on the methods or assumptions for results obtained
Auditor will consider a new client method of processing acct info since it
influences on the design of internal control
Purpose of auditor understanding during planning is to
help interpreting transactions when performing the audit
When fraud is identified, even if IM consider the reliance on
mgmt. representations
lack of independent cks represents a
fraudulent risk factor relating to misappropriations of assets
if evidence is not available for specific transactions, auditor should
evaluate the risk of fraud and design alternate test for the related transactions
If fraud risk increases then auditor should
lower detection risk to perform more testing. independent from audit risk
What assurance does auditor provides on direct and indirect effect on FS for laws and regulations noncompliance?
reasonable assurance for direct effects but no assurance for indirect effects
assessing control risk could be performed
when obtaining an understanding of the entity internal control
