Section 1: Audit Standards & Engagement Planning Flashcards
1
Q
10 GAAS
TIPPICANOE
A
- GENERAL STANDARDS
- Training & Profeciency
- Independence
- Due Professional Care
- FIELDWORK STANDARDS
- Planning and Supervising
- Internal Controls
- Corroborative Audit Evidence
- REPORTING STANDARDS
-
Accounting Principles in Conformity with US GAAP
- Explicitly stated
-
No new accounting principles applied - consistency
- Implicit
-
Omitted Informative Disclosures - none
- Implicit
-
Expression of Opinion
- Explicit
-
Accounting Principles in Conformity with US GAAP
2
Q
10 GAAS Standards
Training & Proficiency
A
- Proper education in accounting
- Knowledge of industry and business
- Practical experience (CPE)
3
Q
10 GAAS Standards
Independence
A
- Ability to act with intgrity and objectivity
- Independence means you, your spouse, dependent kids or relatives
4
Q
10 GAAS Standards
Due Professional Care
A
- Critical review of judgment used at every level
- Skill and care of prudent CPA
- Prep of complete workpapers
- Due diligence
- Professiona; skepticism
- Competent and diligent
5
Q
10 GAAS Standards
Planning & Supervision
A
- Adequately planned and properly supervised
6
Q
10 GAAS Standards
Internal Controls
A
- The auditor must obtain a sufficient understanding of the entity and the envirnoment, including internal controls, to assess the RMM of F/S whether due to error or fraud and to design the nature, timing, and extent of further audit procedures
- Rely more, substantive testing less (inverse relationship)
7
Q
10 GAAS Standards
Corroborative Audit Evidence
A
- The auditor must obtain sufficient appropriate (corroborative) audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the F/S under audit
- Rely more on I/C, less substantive testing needed
8
Q
10 GAAS Standards
Accounting Principles in Conformity to US GAAP
A
- The report must state whether the F?S are presented in conformity with US GAAP
- Explicitly stated in report
9
Q
10 GAAS Standards
No New Accounting Principles Applied - Consistency
A
- THe report must identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period
- Implicitly stated in report
10
Q
10 GAAS Standards
Omitted Informative Disclosures - None
A
- Informative disclosures in the F?S are to be regarded as reasonably adequate unless otherwise stated in the report
- Implicit
11
Q
10 GAAS Standards
Expression of Opinion
A
- The report must contain either an expression of opinion regarding the F/S as a whole or an assertion to the effect that an opinion cannot be given
- Explicit
12
Q
Attestation Engagements
CARES
A
- Independence is needed
- Compilations - unless lack of independence is noted
- Agreed-upon procedure engagements
- Reviews
- Examinations (Audits)
- Special Reports
13
Q
Engagements independence is not needed for
A
- Compilations - if noted
- Taxes
- Consultations
- Other non-attest services like bookkeeping and payroll
14
Q
Questions to ask predecessor auditor
RID-C
A
- Reasons for change
- Integrity of management
- Disagreements during audit
- Communication with Mgt or those charged with Governance
15
Q
Communicated to those charged with Governance
DISAPPROVE
A
- Disagreemnts with mgt
- Noncompliance with applicable laws and regulations (illegal acts)
- Significant accounting policies changed
- Adjustments proposed by auditor
- Prior discussions with mgt
- Problems during audit
- Responsibilities of auditor
- Other info reagrding responsibilities
- Views of other accountants
- Estimates in accounting records
