stuff I won't miss again Flashcards
why should limited procedures be applied to supplementary information?
to determine if the required supplementary info is fairly presented
for a going concern, when should the auditor include:
unmodified + emphasis of matter paragraph
VS
unmodified + going concern paragraph
emphasis of matter: mgmt is able to alleviate going concerns
going concern: mgmt is unable to alleviate going concern
PY: compilation
CY: review
what kind of reference should be made in the CY’s report?
PY’s compilation report should be updated and issued as the last paragraph in CY’s report
financial forecasts are based on [reason] while financial projections are based on [reason]?
expected results, hypothetical assumptions
what is the difference in expression between an audit report vs a review report?
audit renders an opinion
review renders a conclusion
when is obtaining an understanding of internal control appropriate for a review of FS?
when the FS are audited
what should an auditor do if a material weakness is found?
express adverse opinion
the lead/coordinating/reviewing partner must rotate off the audit every [# of years]?
5 years
how do entities qualify for the single audit act?
they expend more than $750,000 of federal financial assistance
does an internal auditor qualify in the 1-year cooling off period?
no
(only CEO/CFO/CAO/Controller)
if an auditor is unable to perform limited procedures in a review of FS, what should they do?
not issue a review report
what type of assurance is provided for compliance reports?
negative assurance
when do overdue audit fees impair independence?
when fees are overdue for more than a year
under the Code of Conduct, a justifiable departure from GAAP includes:
new legislation
new form of business transaction
when FS contain a departure from GAAP bc, due to unusual circumstances, the statements would otherwise be misleading, the auditor’s opinion should be:
unmodified
when a CPA prepares a report on the application of the requirements of an applicable financial reporting framework, what standards are applied?
AICPA
what is the extra factor considered for sample size in a variable sampling?
variability of population
(expected dev rate)
(tolerable misstatement)
(acceptable level of risk/risk of incorrect acceptance)
what is the time frame for matters requiring communication to those charged with governance?
in writing, no later than 60 days after the audit report release date
an issuer eliminated a previously identified material weakness and hired a CPA to attest to the improvements of internal control. what is needed in the engagement?
management must provide a written report to accompany the CPA’s report
when will an auditor reduce reliance on a control? (in terms of the deviation rates)
when upper deviation rate exceeds tolerable rate
what does a govt audit report require that GAAS does not?
internal controls
compliance report
illegal acts that are “more than inconsequential”
what is a condition and level of assurance for a compliance report on contractual agreements?
FS must have been audited
issue negative assurance
what should a disclaimer on agreed-upon procedures say?
disclaim the responsibility for the sufficiency of audit procedures
compliance with law and regulations fall under:
A. quality control
B. AICPA code of conduct
AICPA Code of Conduct
who should an audit report be addressed to?
responsible party
engaging party
engaging party
