Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

REG > Reports on Audit Engagements > Flashcards

Reports on Audit Engagements Flashcards

1
Q

Reporting when evidence is unavailable (scope limitation)

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Elements common to standard audit reports for issuers and nonissuers

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Date of audit report

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

CAM section needed?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

KAM - Key audit matters by report

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

If an auditor does not possess and understanding of the clients business and industry, the auditor should ?

A

Review industry trade journals. It should research and obtain an understanding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is Integrated Audit

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Internal Control Deficiencies

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Disclaimer of opinion

A

Due to scope limitation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Unmodified opinion with emphasis of matter paragraph

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Where in the standard report for nonissuers does the auditor disclaim an opinion on internal control?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Opinion portion of unmodified report nonissuer

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Reporting when there is substantial doubt about going concern

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Which section of the standard unmodified audit report for a nonissuer references GAAS

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

The type of opinion issued (ei qualified/unqualified) never requires a change to the 1___________ responsibilities. Only a _______ requires a change to the ____________

A

1- Management responsibilities
2 - Disclaimer of opinion
3 - Auditors responsibilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Auditors & managers responsibilities sections

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are KAMs?

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Modified Audit Opinions

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

An adverse opinion is issued when the F/S contains ______ that are _____ and _____

A

F/S contain misstatements that are material and pervasive departures from GAAP

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Substantial doubt about the entitys ability to continue as a going concern

A

Include this paragraph when managements plans do not alleviate substantial doubt about the entities ability to continue as a going concern and disclosures are adequate.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

What are Kams

A

Kams are for nonissuers, discussed with management, included in separate section of audit report.

KAMS ONLY in regular audit repots, no disclaimer/adverse op

-Risk of fraud,
-Significant event (ie. potential merger)
-Estimates (ie depreciation)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Emphasis of matter paragraph (EOM)

A

Also a footnote disclosure. (i.e. substantial doubt about going concern has been disclosed and alleviated.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

If theres a significant deficiency but no material weakness in internal control, what opinion do you issue?

unqualified, qualified, adverse, or disclaimor of opinion

A

unqualified

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

EOMS mandatory vs optional

A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

When do you issue a adverse opinion, and what section directly references the Basis for adverse opinion section

A

When there’s misstatements that are material and pervasive. The opinion section directly references the basis for adverse opinion section.

26
Q

Where is the basis for opinion located in an audit report?

A
27
Q

EOM use and example

A
28
Q

Reporting when evidence is unavailable (scope limitation)

A
29
Q

Audit opinions, example situations

A
30
Q

And auditor includes KAM only when __________

A

Engaged to do so. (for Unmodified or qualified opinions).
KAMS should not be included on adverse or disclaimers unless required by law

31
Q

What is RSI

A

Required supplementary information: (ie MD&A) is required by a FAST but not part of FS. RSI does not affect an opinion but specifies if its been included and respected or not.

32
Q

RSI and CPA repot (issuer vs nonissuer)

A
33
Q

Scope limitations can be either disclaimers or qualified opinions. Why which?

A

Qualified if material but not perverse

Disclaimer if material AND perverse.

34
Q

Include emphasis of matter paragraph if change in accounting principle (ie depreciation method) has a ____________________

A

Material effect on the financial statements in the current year

35
Q

When an auditor decides to issue a separate report for issuers IC, the auditor includes __ in the report on F/S

A

Includes immediately following the opinion a paragraph stating date of I/C audit, adult standards (PCAOB), control criteria (COSO) used, and opinion expressed

36
Q

If a issuer company omits cash flow statement, what type of opinion do you report

A

qualified opinion. Omitting cash flow isnt pervasive to be disclaimer

37
Q

What is Audit risk

A

Audit risk is the possibility that an auditor will issue an unmodified opinion on the fair representation of financial statements when an undetected material misstatement exists.

38
Q

Material weakness vs significant deficiency

A

A material weakness is when its reasonably possible a material misstatement would go undetected/corrected by I/C’s in a timely manner. A significant deficiency is les severe than a material weakness but important enough to warrant the attention of those charged with governance.

39
Q

When an auditor decides to issue a separate report for issuers IC, the auditor includes __ in the report on F/S and I/C

A

Includes immediately following the opinion a paragraph stating date of I/C audit, adult standards (PCAOB), control criteria (COSO) used, and opinion expressed.

Managements responsibility for ICFR is stated in I/C and not F/S

40
Q

Standard Unqualified Audit report on Issuers F/S - Basis for opinion notes

A
41
Q

An adverse opinion is issued only when _____

A

the auditor has obtained sufficient appropriate evidence to determine that the F/S contain material and pervasive misstatements.

42
Q

What elements should be included in the auditors report of an issuers internal controls

A

Sections that indicate the auditors opinion, define internal control, and explain inherent limitations of internal control.

43
Q

EOM things to remember

A

EOMs should have:
- appropriate title
- reference to matter being emphasized
- Indicate where addressed in FS
- State opinion is not modified

44
Q

A justified and properly disclosed change in accounting principle results in an

A

Unmodified opinion with an emphasis of matter paragraph.

45
Q

There are no CAMS in adverse or disclaimer opinions, however CAM section is ____________

A

Always required in an unqualified or qualified opinion even if no CAMs are identified.

46
Q

Departures from GAAP are justified when following gap would cause FS presentation to be ______

A

Misleading.

If departure from gaap is justified, include in EOM in unmodified opinion.

47
Q

Because the audit reports on the representations (claims) of management, the report is not addressed to management. Instead it is addressed to the ____________

A

BOD, shareholders, or whoever engaged the auditor.

48
Q

Modified Audit Opinions

A
49
Q

When are Kams refering to a basis of opinion or going concern section

A
50
Q

Top Down Approach to evaluating internal controls over financial reporting

A
51
Q

When is a KAM a KAM?

A
52
Q

In a qualified opinion due to scope limit - what does the opinion section state vs the the basis for opinion section

A

The opinion section indications the qualification is due to the possible effects on the financial statements. The BASIS for opinion section explains what the scope limitation was.

53
Q

If management doesn’t want to make an auditors proposed AJE that are immaterial in the aggregate, than what happens to the audit report ______

A

no disclosure is necessary and an unmodified opinion is appropriate.

54
Q

What section of an unqualified audit report identifies the applicable financial reporting framework.

A

Opinion on the financial statements.

55
Q

The PCAOB requires _______________ not _________ to state the year that the audit firm began serving consecutively as the company’s auditor

A

Issuers, (not non-issuers)

56
Q

“Our responsibility is to express an opinion on ABCs, Incs F/S based on our audits” - is from which section ?

1Opinion on FS?
2Basis for opinion?
3Auditors responsibility for audits of FS?
4Responsibilities of management for FS

A

2Basis for Opinion

57
Q

When client tries to present prior period FS with CY FS which only we audited CY, we need to include a _____

A

Paragraph stating the auditor is not expressing any form of assurance or opinion on the prior period unaudited F/S

58
Q

for repeating engagement in which the prior year reported a qualified opinion, the CY report needs to _____

A

Indicate the substantive reasons for the PYs qualified opinion.

59
Q

What section of nonissuers audit report indicates the titles of the FS audited?

A

Opinion

60
Q

When an auditor qualifies an opinion in an audit of an issuer because of a a scope limitation, the auditor should modify the ________________ section and _________ paragraph

A

Basis for opinion section and opinion paragraph

61
Q

The overall objective of submitting a unmodified opinion on IC over financial reporting is to render ______

A

reasonable assurance that financial records are sufficiently reliable to permit the preparation of financial statements.

62
Q

In what section of an unmodified report for nonoissuers does the include the nature of the audit procedures performed?

1Auditors responsibilities
2Basis for opinion
3Managements responsibilities
4Opinion

A

1Auditors responsibilities

REG (8 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions