Nmonics

Question 1

Understanding the clients business (STAFF)

Answer 1

Staff qualifications
Transaction types and frequency
Accounting basis used 
Form of accounting records
Financial Statements form and content

Question 2

Review of interim financial statements procedures (U-LIAR-CPA)

Answer 2

Understanding with client 
Learn/obtain sufficient understanding of entity
Inquiries should be addressed 
Analytical procedures 
Review other procedures
Client representation letter
Professional judgment should be used
Auditor should communicate results

Question 3

attestation standards “TIPPY”-PASSER

5 general standards

Answer 3

Training and proficiency
Independence
Performance (planning and performance)
Professional adequate knwlg of subject matter
Your belief subject matter is capable of evaluation

Question 4

attestation standards TIPPY-“PA”SSER

2 fieldwork standards

Answer 4

Planning and supervision

Appropriate sufficient evidence to provide reasonable basis for opinion

Question 5

attestation standards TIPPY-PA”SSER”

4 reporting standards

Answer 5

Subject matter identification
Significant reservations disclosure
Express conclusions about subject matter
Restrict use of the report (possibly)

Question 6

Conditions of an Agreed Upon Procedures Engagement (I-AM-SURE)

Answer 6

Independence of the Practitioner
Agreement of the parties
Measurability and Consistency
Sufficiency of the Procedures
Use of the report is restricted
Responsibility for the subject matter
Engagements to Perform Agreed Upon procedures on Prospective FS

Question 7

6 financial statement assertions (COVER-U)

Answer 7

Completeness
CutOff
Valuation, Allocation, and Accuracy
Existence and Occurence
Rights and Obligations
Understandability and Classification

Question 8

Relevant Assertions (TAP)

Answer 8

Transactions and Events
Account Balances
Presentation and Disclosures

Question 9

Assessing the Risk of Material Misstatement (IMACPA)

Answer 9

• Internal control, entity environment understanding
• Material misstatement, asses the risk
• Assessed level of risk response
• Control testing
• Perform substantive testing
• Audit evidence, evaluate appropriateness & sufficiency

Question 10

5 components of Internal Control (CRIME)

Answer 10

Control environment (tone of org)
Risk assessment (mgmt identification)
Information and Communication systems
Monitoring (internal control over time)
Existing Control Activities (policy and procedures)

Question 11

Existing Control Activities in a strong system (PAID-TIPS)

Answer 11

Pre-numbering documents
Authorization of transactions
Independent checks to maintain asset acctblly
Documentation
Timely and appropriate performance reviews
Information processing controls
Physical controls for safeguarding assets
Segregation of duties

Question 12

3 elements of further audit procedures - We cast our “NET” over the audit

Answer 12

Nature
Extent
Timing