Overview Flashcards
An engagment in which the CPA is engaged ot issue or does issue an examination, review, or an agreed-upon procedure report on subject matter or an assertion taht is the responsibility of another party
Attest engagement
A type of attestation engagement that involves historical financial statements and normally results ina positive opinion that provides reasonable assurance by selecting from all available evidence
Examination
An attestation engagement that is substantially less in scope than an audit and consists primarily of
- the application of analytical procedures
- making inquiries of managment
- obtaining representations from management
- -results in a report with limited (negative) assurance
Review
A type of attestation engagement that results in a report that describes the procedures performed and related findings–summary of findings
Agreed-upon procedures
A CPA service with the objective to presenting information that is the representation of management without expressing any assurance on the statements
CPA’s primary role in this type of service is to prepare hte financial statements so they must disclaim any opinion and give no assurance
Compilation
Tests performed to determine wehther key controls are properly designed and are operating effectively
Tests of controls
Procedures used to provide evidence as to whether actual account balances and disclosures are proper that can be derived from
- analytical procedures
- test of details
Substantive procedures
Substantive procedures used to obtain audit evidence about particular assertions related to account balances or classes of trnasactions–auditor gathers evidence about relationships amoung various accounting and nonaccounting data and compare to expectations
Substantive analytical procedures
Substantive procedures used to detect misstatements in the financial statements, specifically misstatements of relevant assertionsrelating to transactions, account balances, and disclosures
Test of details
The name for an unqualified report in the AICPA and internaional standards
“unmodified”
Auditing standards issued by hte Auditing Standards Board that are considred GAAS for the audits of nonissuers
Statements on Auditing Standards (SAS)
A SAS in whichthe auditor must comply with the requirement in all cases in which the circumstances exist–uses words must or required
Unconditional requirement
A SAS in which the auditor must comply, but in rare circumstances, may depart from such a requirement–uses “should”
Presumptively mandatory requirement
The applicable standards for attestation engagements on subject matter other tahn the financial statements
Statements on Standars for Attestation Engagements (SSAEs)
standards that provide the autoritative guidance on procedures and reporting of compilation and review engagements of nonissuer entity financial statements
Statements on Standards for Accounting and Review Services (SSARSs)
Standards that apply to the accounting and auditing practices (including all attest services) of all firms–used when evaluating a firm in a peer review
Satements on Quality Control Standards (SQCS)
Authoritative body that issued the Statements on Auditing Standards (SAS) (AU)
Auditing Standards Board–part of AICPA
Quality control standards related to the conduct of individual audits
GAAS (Generally Accepted Auditing Standards)
Quality control standards that relate to the overall audit practice/firm
Quality Control Standards
Auditing standards used in the audit of issuer companies
PCAOB auditing standards
Type of relationship between audit risk and materiality at the individual account balance, class of transaction, or disclosure level
Inverse relationship
The objective of these standards are to prevent misinterpretation fo the degree of responsibility assumed by the accountant when his/her name is associated with financial statements
Standards on Reporting
The classification for statemetns that have not been audited–only applies to public companies because such statements would be considered “compiled, re iewed, or audited” under AICPA standards for nonissuers
Unaudited
- -each page should say “unaudited”
- -cannot express opinion (b/c not audited), but can make a disclaimer refering to a departure from GAAP
financial and nonfinancial information (other than the financial statements and the auditor’s report thereon) that is included in a document containing audited financial statements and the auditor’s report htereon, excluding required supplementary information–auditor shoudl just read it
Other information
Information outside the basic financial statements ( excluding required supplemetnry information) that is not considered necessary for the financial statements to be fairly presented in accordance withthe applicable finanical reporting framework
Supplementary information
Issuer of the Government Auditing Standards (GAS) or GAGAS
Comptroller General of the United States, General Accounting Office
