Reviewing

Question 1

What is included in PCAOB inspections?

Answer 1

Inspections may include consideration of aspects of practice mgmt, such as how the partners compensation is determined.

Question 2

What procedure could indicate a going concern issue?

Answer 2

review of compliance with terms of debt agreements - may reveal that the company is not in compliance due to financial difficulties

Question 3

Do agreed upon procedures require independence?

Answer 3

yes

Question 4

What is required content of mgmt’s report on internal control under the PCAOB standards?

Answer 4

The criteria used for assessment.
Mgmt’s acknowledgment of responsibility for I/C.
Mgmt’s assessment of I/C

Question 5

What is a method of judging the internal auditors objectivity?

Answer 5

review the recommendations made in the reports of internal auditors

Question 6

Is an engagement letter required for agreed upon procedures?

Answer 6

not required for AUP of special elements, accts, or items of FS

Question 7

A statement of restriction on the used of the report to only specified users is included in what procedures?

Answer 7

Agreed upon procedures

Question 8

Do reviews of FS include consideration of internal control?

Answer 8

No

Question 9

Who promulgates standards for audits of federal fin assistance recipients?

Answer 9

General Accounting Office ( as indicated in Governmental auditing standards)

Question 10

What should be included in a compilation report

Answer 10

wording that indicates the accountants lack of independence

Question 11

What should the auditor do regarding supplementary info

Answer 11

compare the required supplementary info for consistency with the audited FS

Question 12

A compilation report should include statements that

Answer 12

There will usually be differences between the forecasted and actual results.
The accountant has no resp. to update the report for future events and circumstances.
The compilation of a projection is limited in scope.

Question 13

What is the primary purpose of a sales cutoff test

Answer 13

to obtain a reasonable assurance that sales and AR are recorded in the acct period during which title has passed

Question 14

What does the auditor do with segment information

Answer 14

Audit the segment info, and if the info is adequate and in conformity with GAAP, do not make reference to the segment info in the auditors report

Question 15

What is the purpose of looking at bills of trading

Answer 15

to trace shipments to customers invoices to obtain evidence that merch that was shipped has been invoiced

Question 16

When may a CPA charge contingent fees?

Answer 16

if fixed by courts, other public authorities, or in tax matters if based on the results of judicial proceedings

Question 17

Inherent risk

Answer 17

the susceptibility of a FS assertion to a material misstatement assuming there are no related controls

Question 18

what standards should be used for compilations?

Answer 18

SSARS

Question 19

What is included in quality control policies and procedures applicable to the firms acct and auditing practice

Answer 19

Engagement performance.
Leadership resp for quality within the firm.
Relevant ethical requirements.
Acceptance and continuance of client relationships and specific engagements.
Human Resources.
Monitoring

Question 20

Who presumptively requires confirmation of acct balances

Answer 20

PCAOB.
Auditing standards board.
(intl auditing standards do not

Question 21

GAO

Answer 21

gov accountability office - conducts operational audits and reports the results to congress

Question 22

What representation is required when an auditor prepares FS

Answer 22

an engagement letter (not a rep letter or report)

Question 23

What type of opinion is a material weakness?

Answer 23

Adverse

Question 24

client wont let you contact legal counsel

Answer 24

disclaimer

Question 25

Comfort letters are addressed to ___ and signed by ___

Answer 25

addressed to the client underwriter of securities and signed by the auditor

Question 26

What is the function of IC from the viewpoint of the auditor

Answer 26

to provide reasonable assurance that MM may either be prevented or discovered with reasonable promptness, thus assuring the reliability and integrity of the financial records

Question 27

When is omission of disclosures required by GAAP allowed

Answer 27

when clearly indicated in the report and the omission is not undertaken with the intention of misleading the users of the FSs

Question 28

An auditor uses the assessed level of the ROMM to

Answer 28

determine the acceptable level of detection risk for FS assertions. the auditor then uses the acceptable level of detection risk to determine the nature, timing, and extent of the auditing procedures to be used to detect MM in the FS assertions

Question 29

If you are auditing the main entity and another auditor is auditing the sub, and you choose to NOT take resp for their work - how does that affect the report?

Answer 29

Modify the Auditor’s Resp Paragraph and modify the Opinion Paragraph. (no need to change the intro or modify the opinion given.)

Question 30

What is included in attest engagements

Answer 30

Review
Engagement
Agree upon procedure

Question 31

By SEC/PCAOB standards, is the auditor independent when preparing FS?

Answer 31

Nope

Question 32

Compilation reports should be modified if

Answer 32

there is a departure from GAAP