Sim Exam 2 Reinforcement Flashcards
what two circumstances require modification of an accountant’s report on a review of interim financial info of a public company?
lack of adherence to GAAP
lack of adequate disclosure
A change in accounting principle that is inseparable from a change in estimate should be accounted for as change in ___, not a change in ___.
estimate; principle
under PCAOB independence standards, can non-audit services related to IC be provided to an audit client?
yes, but must be communicated and discussed with audit committee first
negligence in preparing client records would be considered what?
an act discreditable to the profession
when looking at cash transfer schedule, what would indicate a misstatement of cash?
disbursement per books and deposit per books are recorded in different periods
Negative assurance may only be provided for an engagement to report on compliance of contractual agreements related to audited financial statements when there are no…? (3 things)
identified instances of noncompliance, the auditor has expressed an unmodified or qualified opinion on the financial statements, and the applicable covenants have been subjected to audit procedures as part of the financial statement audit.
the report should also be restricted (other-matter)
in an integrated audit, what are the three types of opinions that can be issued on internal control?
unqualified, adverse, disclaimer
in the integrated audit of an issuer, should an explanatory paragraph be included in the report if an adverse opinion is issued on internal control?
an explanatory paragraph must be added that defines and describes the material weakness.
if a firm in public practice is owned by 2 CPAs and 3 non-CPAs, what AICPA code of professional conduct rule would this violate?
Form of organization and name
The auditor would only communicate with those charged with governance regarding ___ acts of noncompliance with laws and regulations, not ___ acts of noncompliance with laws and regulations .
detected; possible
