Review Tests Flashcards
What does the AICPA code of conduct govern?
Any service that a member of the AICPA performs, including compilations and reviews
Which department approves proper authorizations of write offs of uncollectible accounts?
The treasurer. They have no billing responsibility, resulting in a better segregation of duties
Before a predecessor auditor reissues the prior year’s audit report on the F/S of a former client for inclusion with the successor auditor’s report on comparative F/S, what must the predecessor do?
- Obtain a successor auditor representation letter
- Obtain the current comparative financial statements
- Compare current period comparative F/S with prior years
(They SHOULDN’T Review the audit documentation of the successor auditor)
If no other material misstatements were found but an independent auditor determines that supplementary information is not fairly stated, what opinion should they issue?
They should issue an unmodified opinion with an other-matters-paragraph to describe the auditors position on the supplementary information
What principles of professional ethics are included in the International Code of Ethics for assurance engagements?
Integrity, objectivity, professional competence and due care, confidentiality, and professional behavior
In planning the audit, the auditor should consider materiality for the financial statements as a whole in terms of…
The smallest aggregate level of misstatement that could be considered material to any ONE of the Financial Statements
What is one thing that is not assessed by the auditor as part of the decision regarding the acceptance of a new client?
The integrity of the audit firm (They would assess the integrity of management, however)
Is a report on managements assertion on the effectiveness of internal control a restricted report?
NO, the report is not restricted. (it also expresses an opinion)
Determining that proper amounts of depreciation are expensed relates to what assertion?
Valuation and Allocation - the allocation of asset cost over time and the valuation of fixed assets on the balance sheet
What is audit risk?
The risk that the auditor may unknowingly fail to modify appropriately the opinion on the financial statements that are materially misstated.
