Unit 2 Flashcards
Engagement performance and evaluating personnel advancement are part of a firm’s __________
Quality Control
Documentation completion timing for SEC-filers and nonissuers?
45 Days / 60 Days
Documentation retention for SEC-filers and nonissuers?
7 Years / 5 Years
What do workpapers document? (2)
Procedures applied and conclusions reached
What are 3 required elements of documentation?
Engagement Letter, Audit Program, and Written Assessment of RMM
Documentation cannot be deleted after which date?
The documentation completion date
What should the successor auditor ask the predecessor auditor pre-engagement acceptance?
About management integrity and reasons for change in auditors
The (client/successor auditor) should ask the predecessor for the workpapers.
Client
The successor auditor (does/does not) need client permission to discuss matters with the predecessor.
Does need
If an engagement changes for a justifiable reason, the original reasons and engagement type (should/need not) be referred to
Need NOT
Management (is/isn’t) required to correct internal control deficiencies identified by the auditor.
Does NOT
At what point in the audit engagement is the management rep letter signed?
At the end
When does the auditor consider finding from substantive interim tests?
During fieldwork
What is done during the planning stage of an audit? (3)
1) Understanding industry and control environment
2) General Audit Strat developed
3) Prelim judgements about materiality
What should the auditor do if the client refuses assess to predecessor documents?
Review Risk Assessment (we can work around this)
What should the auditor do if the client refuses to let the auditor discuss the PY engagement with the auditor?
Withdraw
Where in the audit report is a specialist’s work referred to?
EOM
When can we use a reference to a specialists work?
Modified reports and worse ONLY
The comprehensive audit plan is (more/less) detailed, and covers (more/less) areas that would typically not be covered by a CPA
MORE/MORE
Internal auditors may assist the CPA in all aspects except ___________
Subjective Valuation of Confirmations
For a FS audit, an understanding must be developed for each ________
Financial Reporting Objective
Unmodified interrim info (can/can’t) be used to develop expectations during planning
Can
Primary consideration for internal control is whether they affect _________
FS Assertions
Observation and inspection help to evaluate the _____ of controls
Design
Monitoring internal control includes (3)
1) Improving IC
2) Assessing Quality over Time
3) Assessing info from External Parties
Planning usually happens (before/after) the BS date.
Before
The auditor’s version of a client’s program is used to process data and compare is called _________
Parallel Simulation
Fictitious and real transactions are mixed
Integrated Test Facility
This is processed by a client program under the auditor’s control.
Test Data
Parallel Simulations can (increase/decrease) sample size at (greater/lower) cost.
Increase / Lower
