Week 5

Question 1

Component auditor

Answer 1

Performs work on the financial information related to a component

Question 2

Component

Answer 2

Entity or business activity whose financial information is included in the group financial statements

Question 3

Scope

Answer 3

Audit procedures deemed necessary in the circumstances to achieve the objective of the audit

Question 4

Full scope

Answer 4

Performing a full audit of the component’s financial statements

Question 5

Specific scope

Answer 5

Audit procedures in those areas where significant risks were identified

Question 6

Limited scope

Answer 6

Review of the component entity’s financial statements

Question 7

No scope

Answer 7

Limited level of scoping, means no specific audit procedures at the level of the component

Question 8

Subsequent events

Answer 8

Events ocurring between the fate of the financial statements and the date of the auditor’s expert

Question 9

Auditor’s expert

Answer 9

Individual possessing expertise in a field other than accounting or auditing

Question 10

Unmodified/unqualified opinion

Answer 10

The auditor may not refer to the auditor’s expert unless its required by law

Question 11

Modification

Answer 11

The auditor may refer

Question 12

Service organization

Answer 12

A third party organization that provides services to user entities that are part of those entities’ information systems relevant to financial reporting

Question 13

Type 1 report

Answer 13

Report on the description and design of controls at a service organization:

• management description of the service organization
• report by the service auditor

Question 14

Type 2 report

Answer 14

Report on the description, design and operating effectiveness of controls at a service organization:

• management desciption of the service organization
• report by service auditor
• description of the service auditor’s test of controls and the results thereof