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CPA Review AUD > Self Made AUD Flashcard > Flashcards

Self Made AUD Flashcard

1
Q

Audit opinion enhances what?

A

Degree of confidence that intended users place on the F/S

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2
Q

US GAAS Applies to what type of company? Public or Non Public?

A

Non Public

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3
Q

Does US GAAS address auditor responsibilities over legislation/law?

A

No. It is the responsibility of the auditor to ensure compliance

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4
Q

An audit accordance with GAAS means what for management and those charged w/ governance?

A

That they acknowledge their responsibilities that are fundamental to the audit

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5
Q

the auditor’s responsibility to express an opinion is the ____ sentence in the ____ paragraph?

A

1st sentence in the auditor responsibility paragraph

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6
Q

What is the role of US GAAS?

A

To contain objectives/requirements/applications that are designed to support the auditor to obtain assurance

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7
Q

Interpretive publications consist of: (4 items)

A

Auditing interpretations of US GAAS
Exhibits to GAAS
AICPA Audit & Accounting Guides
AICPA Auditing Statements of Position

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8
Q

Can management be apart of those charged with governance?

A

Yes: two situations

  1. Executive members of a governance board
  2. Owner-manager
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9
Q

PresumptivelyMandatory Requirement word:

A

Should

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10
Q

Relevant Assertion

A

F/S Assertion that contains a possibility of a misstatement

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11
Q

Does RMM exist independent of the audit?

A

Yes

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12
Q

Is RMM the risk of the auditor or the entity?

A

Entity

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13
Q

US GAAS is developed and issued in the form of _____

A

SAS - Statements on Auditing Standards

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14
Q

When preparing and presenting unaudited F/S to 3rd parties, what standard oversees this?

A

SSARS - Statements on Standards for Accounting And Review Services

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15
Q

Are Audit Standards the same as Audit Procedures?

A

No

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16
Q

What do audit procedures do?

A

Meet requirements of GAAS and gather audit evidence

17
Q

What do audit standards do?

A

Provide objectives that audit procedures attain

18
Q

Do audit standards vary from engagement to engagement?

A

Hell no

19
Q

Can the auditor apply an AU section before the specified effective date?

A

Yes

20
Q

Can an auditor conduct an audit in both US GAAS and
PCAOB
International Auditing Standards (ISA)
Government Auditing Standards?
Auditing Standards of a specific jurisdiction or country?

A

Yes. May need to perform additional audit procedures to comply w/ other auditing standards

21
Q

Are Interpretive Publications recommendations or requirements?

A

Recommendations

22
Q

Who issues Interpretive Publications?

A

AICPA’s ASB (AUidtng Standards Board)

23
Q

What type of standards are intrepretive publications

A

They’re not standards

24
Q

Preparation and fair presentation of the F/S in accordance with Applicable Financial Reporting Framework encompasses:

A

Selecting appropriate accounting policies

making reasonable accounting estimates

25
Q

Can an auditor reduce audit risk to zero?

A

No

26
Q

Can detection risk be eliminated?

A

No – only reduced

27
Q

Greater the RMM the less the____

A

Detection Risk

28
Q

What determines the form and content of the F/S

A

AFRF

29
Q

List The General purpose Frameworks

A

FASB - IFRS - GASB - SFFAS

30
Q

What are general purpose frameworks for?

A

Meeting the common Financial info. needs of a wide range of users

31
Q

Describe special purpose frameworks

A

Framework other than GAAP – Cash, tax, regulatory, contractual basis of accounting

32
Q

Are audit interpretations included in the codification of GAAS?

A

Yes – right after the related AU section

33
Q

Three Sources of Inherent Limitations

A
  1. Nature of Audit Procedures
    - Management doesn’t provide all info
  2. Nature of Financial Reporting
    - Fraud/Incomplete info from the entity/Auditor has limited authority
  3. Time/Economic Constraints
    - Plan audit to be performed in effective manner
34
Q

Is related party relationships/transactions a significant concern?

A

Yes

35
Q

RMM exists at what two levels?

A

Financial statement and assertion

36
Q

What two components exist at the assertion level in relation to RMM?

A

Inherent risk and control risk

37
Q

Define Inherent Risk

A

Accounts/classes of transactions/disclosures is susceptible to a misstatement BEFORE considering control risk

38
Q

Can professional judgment be used as a justification for decisions that aren’t supported by facts?

A

NOPE

39
Q

List the content of each AU Section:

A

I (O)we Drae - I O AU - I O U DRAE

I - Introduction – includes purpose of AU section
O - Objective
D - Definition - Terms defined in context of section
R - Requirement
A- Application - May/Might/Could words are used
E - Exhibits

CPA Review AUD (8 decks)

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