NINJA AUD - Evaluating Audit Findings, Communications, and Reporting Flashcards
An auditor most likely would apply analytical procedures in the overall review stage of an audit to:
determine whether additional audit evidence may be needed.
In testing the existence assertion for an asset, an auditor ordinarily works from the:
accounting records to the supporting evidence.
When should the auditor’s report be dated?
No earlier than the date on which the auditor has obtained sufficient appropriate audit evidence
Concerning the content of audit documentation…
It is appropriate to use calculator tapes with names or explanations on the tapes rather than writing separate lists onto workpapers.
In using the work of a specialist, an auditor may refer to the specialist in the auditor’s report if, as a result of the specialist’s findings, the auditor:
adds an emphasis-of-matter or other-matter paragraph to the auditor’s report to emphasize an unusually important subsequent event.
An auditor who uses the work of a specialist may refer to the specialist in the auditor’s report if the:
auditor modifies the report because of the difference between the client’s and the specialist’s valuations of an asset.
A difference in management’s and the auditor’s position would be:
a judgmental misstatement, NOT a factual misstatement.
The auditor should include in the audit documentation:
a. the amount below which misstatements would be regarded as clearly trivial;
b. all misstatements accumulated during the audit and whether they have been corrected; and
c. the auditor’s conclusion about whether uncorrected misstatements are material, individually or in aggregate….
An unreturned negative confirmation request typically does not provide significant explicit evidence because:
nothing assures the auditor a missing response means the respondent agrees with the data.
The focus of a second or wrap-up workpaper review performed is:
the fair presentation of the F/S in conformity with GAAP.
In auditing accounts receivable, the negative form of confirmation request most likely would be used when:
the combined assessed level of inherent and control risk relative to accounts receivable is low.
If management declines to present supplementary information required by the Governmental Accounting Standards Board (GASB),
the auditor should issue an unqualified report with an additional explanatory paragraph.
If the client refuses to correct the other information included in the documents containing audited financial statements,
the auditor will have to revise the audit report, withdraw from the audit report, or withdraw from the engagement.
Under PCAOB Auditing Standard 3, audit documentation should be retained no fewer than how many years following the report release date?
7 years
If there are inadequately disclosed conditions that cause the auditor to have substantial doubt about the entity’s ability to continue as a going concern,
the auditor must determine whether to issue a qualified or adverse opinion.
When an auditor is unable to obtain sufficient appropriate audit evidence about a significant item in the F/S:
he should consider the need to express a qualified opinion or to disclaim an opinion because of a scope limitation.
Comfort letters are ordinarily addressed to the client’s ______ and signed by the client’s ______.
underwriter of securities; independent accountant.
To express an unmodified opinion using an unmodified report covering single-year financial statements:
- comparative financial statements are not presented—i.e., the prior year’s financial statements audited by another CPA are not presented.
- the prior report expresses an unmodified opinion.
When an entity changes its method of accounting for income taxes, which has a material effect on comparability,
the auditor should refer to the change in an emphasis-of-matter paragraph added to the auditor’s report.
This paragraph should describe the change and refer to the financial statement note that discusses the change in detail.
Sufficient and appropriate documentation should include:
evidence that the audit working papers have been reviewed.
Because the supplementary information is NOT a required part of the basic F/S,
the auditor should apply only certain limited procedures.
Under Government Auditing Standards, an auditor is required to state that:
compliance with laws and regulations is the responsibility of the entity’s management.
AT 601.07 states that:
“a practitioner should not accept an engagement to perform a review of an entity’s compliance with specified requirements or about the effectiveness of an entity’s internal control over compliance or an assertion thereon.”
The practitioner’s report on agreed-upon procedures on an entity’s compliance with specified requirements should include:
identification of the responsible party.
