AUD-Nemonics Gradual

Question 1

What are the Steps in an Audit?

Answer 1

PUR-CSOI

Prepare the Audit

Obtain Understanding of Client, its environment, including Internal Control

Asses Risks of Material Misstatement and Determine nature, timing & extend of further procedures

Perform Tests of Controls

Perform substantive procedures

Formulated an opinion

Issue audit report

Question 2

What are the Reporting Standards?

Answer 2

All Cpas Do Ok

Accounting Principles in Accordance with GAAP
No New Principles - Consistency
Omitted Disclosures - None
Express Opinion

Question 3

The auditor must maintain independence for attestation engagements if?

Answer 3

CARES

Involve any of the following:

Compliations (Unless lack of independence is indicated)
Agree-upon procedure engagements
Reviews
Examinations
Special Reports

Question 4

What are the elements of the Engagement Letter?

Answer 4

FACSIMILE

Fees

Auditor’s Responsibility (*)

Confirmation of Engagement

Scope and Objective of Engagement

Interal Control

Management’s Responsibility

• Irregularities
• Illegal Acts
• Errors
• = Auditor’s Responsibilities

Question 5

What inquiries does a successor auditor need to make when accepting a new client?

Answer 5

RID-C

Reasons for change
Integrity of management
Disagreements during audit
Communication with management or those charged with governance

Question 6

What matters should be communicated to those charged with governance during the audit?

Answer 6

DISAPPROVE

Disagreements with management

Illegal Acts (Noncompliance with laws and regulations, including illegal acts)

Significant accounting policies; adopted or changed by management

Adjustments; proposed by auditor with a significant impact on financial records

Prior discussions with management; before acceptance of engagement

Problems ariding during the audit in obtaining evidience

Other information regarding responsibilities; regarding resposibilities

Views of other accountants; who were contacted by mangaement on significant matters

Estiamates; in the accounting records and the process used to obtain them.

Question 7

What are the audit planning procedures?

Answer 7

BRAINSTOPS

Basic discussions with client

Review of audit documentation

Ask about recent developments

Interim Financial statements

Non-audit personnel

Staffing

Timing

Outside assistance

Pronouncements

Scheduling with client

Question 8

Under AS 15, Audit Evidence, what are the procedures designed to support management’s assertions?

Answer 8

PERCV

Presentation and disclosure

Existence or occurrence

Rights and obligations

Completeness

Valuation or allocation

Question 9

What are the quality control requirements that firms must follow at the firm level?

Answer 9

HEAL-ME

Human Resources (Personnel Management)

Ethical Requirements (Independence)

Acceptance and continuance of client relationships and specific engagements

Leadership responsibilities for quality within the firm

Monitoring

Engagement Performance

Question 10

When must independence be maintained?

Answer 10

ERAS

Examinations

Reviews

Agreed-upon procedure engagements leading to findings

Special Reports

Question 11

What does the Private Securities Litigation Reform Act of 1995 establish?

Answer 11

RIG

Tests to detect

Related Party Transactions

Illegal Acts

Going Concern Doubts

Question 12

What are the five issues that are addressed by the SSPFPS?

Answer 12

POD-IM

Planning the engagement
Obtaining and analyzing information
Developing and communicating recommendations
Implementation engagement
Monitoring and updating engagements