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Audit > SU 01 Professional Standards > Flashcards

SU 01 Professional Standards Flashcards

1
Q

Assurance

A

Umbrella term including audit, attestation and other services (such as risk advising, website security, data integrity)

Providing assurance: providing the public some manner of assurance that a thing is legitimate

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2
Q

Attestation

A

Practitioner reports on specific subject matter
includes audit + other services (examinations (of financial forecasts), reviews, agreed-upon procedures)

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3
Q

Audit

A

Auditor presents an opinion on the reliability of (historical) financial statements, internal controls are assessed

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4
Q

What auditing standards are set by the AICPA

A

Statements on auditing standards (“professional” standards)

sets official standards for non-issuers

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5
Q

Non-issuers

A

non-publicly traded companies

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6
Q

Statements on Auditing standards

A

SAS
set by the AICPA

codified as AU

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7
Q

What auditing standards are set by the PCAOB?

A

Final authority on standards for issuers

initially adopted AICPA standards then the created their own

Codified as AS

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8
Q

What are staff accounting bulletins

A

issued by the SEC

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9
Q

what are three types of peer review

A
  • System review
  • Engagement Review
  • Report review
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10
Q

What is system review?

A

the highest level of peer review - onsite review

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11
Q

What is Report review?

A

the lowest level of peer review - paper review only

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12
Q

What is Engagement Quality Review?

A

EQR

review of audit firm by the PCAOB

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13
Q

What are the legally mandated audit objectives

A
  • identify and assess risk of material misstatement of the financial statements, whether due to fraud or error, ad design and perform audit procedures responsive to those risks
  • conclude whether there is substantial doubt about the client’s ability to continue as a going concern
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14
Q

What is the subject of an audit

A

financial statements

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15
Q

What is a review vs an audit

A

lower level attestations, not an audit - does not consider internal controls

only available for private companies

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16
Q

AUPs

A

Agreed upon procedures

contract to examine some specific thing (internal controls, XBRL)

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17
Q

what is the biggest internal control risk

A

humans

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18
Q

ICFR

A

internal controls over financial reporting

now a required part of the audit

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19
Q

on what does the frequency of PCAOB reviews of audit firms depend?

A

Number of audit clients

20
Q

on what does the frequency of PCAOB reviews of audit firms depend?

A

Number of audit clients

21
Q

Who conducts peer review of audit companies

A

other auditing companies

22
Q

What are the statements on quality control standards

A

SQCS

general statments about how to do good quality work

23
Q

What are the categories of attestation standards?

A

General standards
Standards of field work
standards of reporting

24
Q

What are the general attestation standards

A
  • Training and proficiency in attestation
  • knowledge of the subject matter
  • suitable and available criteria (objective, relevant)
  • mental attitude of independence
  • due professional care
25
Q

What are the attestation standards of fieldwork

A
  • planning and supervision
  • sufficient evidence to form a reasonable basis for conclusion
26
Q

What are the attestation standards of reporting

A

Must be stated in the attestation report:
- character of engagement
- conclusion about the subject matter
- significant reservations (CAMS)
- restrictions of use

27
Q

SSAE

A

Statement of standards for attestation engagements

28
Q

What is the character of an auditing engagement

A

audit, subject matter is financial statements

29
Q

What is the conclusion about the subject matter of an audit engagement

A

auditor’s opinion

30
Q

What are CAMS

A

critical audit matters

31
Q

What does an auditor’s report examine

A

evidence supporting the:
- amounts and disclosures in financial statements
- accounting principles used
- significant estimates made by management
- financial statement presentation

32
Q

what are the components of fair presentation of financial reports

A

Proper recognition, measurement, presentation and disclosure

33
Q

What are the types of management assertions

A
  • About classes of transactions and events for the period (IS & SCF)
  • about Account balances at the end of the period (BS)
  • about presentation and disclosures (notes)
34
Q

What are the main management assertions

A
  • Completeness
  • Accuracy
  • Presentation
  • Existence
  • Cutoff
  • Rights & Obligations
  • Occurrence
  • Classification

EVERYTHING AUDITED IS DESCRIBED IN THESE TERMS

35
Q

What is the completeness assertion

A

All the transactions, events, accounts and disclosures were recorded and included in statments

Relates to IS, BS, Notes

36
Q

What is the accuracy assertion

A

That all amounts are appropriate

aka valuation and allocation

Relates to IS, BS, Notes

37
Q

What is the presentation assertion

A

That the components of the financial statements are properly classified, described, and disclosed

Relates to IS, BS

38
Q

What is the existence assertion

A

That the items described on the balance sheet exist

Relates to BS

39
Q

What is the cutoff assertion

A

That all events and transactions have been recorded in the proper period

Relates to IS

40
Q

What is the Rights and Obligations assertion

A

That assets and liabilities shown belong to the firm in question, and all existing rights and obligations are recorded

Relates to BS and notes

41
Q

What is the occurrence assertion

A

that the transactions and events recorded actually occurred

Relates to IS and Notes

42
Q

What is the classification assertion

A

That amounts are recorded in proper accounts and properly presented

Relates to IS, BS, and notes

43
Q

Which management assertions related to the income statement

A

Completeness
Accuracy
Presentation
Cutoff
Occurrance
Classification

44
Q

Which management assertions relate to the balance sheet

A

Completeness
Accuracy
Presentation
Existence
Rights & Obligations
Classifications

45
Q

Which management assertions relate ONLY to the balance sheet (not the income statement)

A

Existence
Rights & Obligations

46
Q

Which management assertions relate ONLY to the income statement (not the balance sheet)

A

Cutoff
Occurrence

47
Q

Which management assertions relate to both the income statement and the balance sheet

A

Completeness
Accuracy (Valuation & Allocation)
Presentation
Classification

Audit (13 decks)

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