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Flashcards in Audit 15 Deck (21)
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What opinion can you give if you get sufficient audit evidence for all F/S items but opening inventory due to inadequate records

Unmodified opinion on balance sheet and disclaimer of opinion on I/S

If you are able to audit the ending balance, there is NO scope limitation and unmodified opinion can be issued on the balance sheet


what are CPA Sys Trust and CPA Webmaster engagements

Systrust - attest engagement - where a report is issued addressing the system's reliability

Webtrust - provide assurance as to whether the website complies with certain criteria applicable to commence


What do you do with the integrated test facility approach

auditor will run fictitious transactions through the client system along with client data to make sure it is receiving the same treatment and enabling the auditor to run fictitious transactions through the client' system


What is a self-checking digit

It is a formula applied ti determine if an identification number, like an employee number, customer number, or invoice number tis valid
- identification numbers are assigned applying the formula


When an audit client hires away a member of the audit engagement - what must happen at the next annual audit of the client

the next annual audit must be separately reviewed by an audit firm professional uninvolved in the audit


what will an agreed upon procedures report indicate:

- the subject matter is the responsibility of the client's management

- The procedures performed were those agreed upon with specified partied

-Distribution of the report is restricted to such parties knowledgable about the agreement

NOTHING about limited assurance - this is for a REVIIEW


What procedure is the most effective in reducing attestation risk

Examination of evidence


What are the dates of the Management Rep Letter

It applied through the date on which the field work is completed - which is generally the date of the Auditor's report and should also be the date of the representation letter


What is an example of a type of evidence that an auditor most likely would examine to determine whether internal control policies and procedures are operating as designed

Look at client records documenting the use of EDP programs. If the are being used properly - this support conclusions about Internal control


What will an auditor do when performing risk assessment in an integrated audit of a non-issuer

- auditor will identify significant accounts and relevant assertion - in which a misstatement could result in a material misstatement in the F/S

- Select controls for testing on the basis of whether they will reduce the necessity for substantive testing

- Determine the criteria to be applied in evaluating the controls and the type of evidence that will allow the auditor to draw a conclusion

- They do NOT draw a conclusion as to the specific control, but rather as to the effectiveness of control over financial reporting both overall and in relation to relevant assertions


How do the scope, procedures and purpose of an examination of internal controls compare to those for obtaining an understanding of I/C - similar or different

Different scope - examination is more extensive

Procedures are the same - but more for Examin

The purpose if different - - one is to express an opinion nd the otters is to get an understanding to determine the nature, timing and extent of testing


The distribution of the report on internal controls in conjunction with an audit is restricted or not restricted

Restricted to management, the audit committee and BoD


What is an auditor to do if they are unable to obtain sufficient appropriate audit evidence through the performance of substantial procedures exclusively

They will perform tests of control - This may be the case for example when auditing the contributions received by a non profit since ether are no goods exchanged


What is include in a report on Internal Control expressing an unqualified opinion on I/C

- Acknowledgement of mgmt responsibility for internal control

- a description of what


All of these are NOT material weakness

- deficiency in I/C design - reasonable possible

- poor execution of a well -designed control create remote possible of MM

-a flaw in the execution of a well-designed control creating the probability of an immaterial misstatement


When engaged to examine and report on management written assertion of effectiveness of internal control, what form must the written representation be in

It must be in a separate report that will accompany the accountant's report


What do you do if you detect a high number of significant deficiencies as a result of performing TOC

Assess CR as high and perform more sub testing.

No need to give a qualified opinion if through sub testing you are able sufficient appropriate audit evidence


Why is an auditor always required to document the auditor's understanding of internal control

To document the basis for risk assessment -

- assess the RMM is done by obtaining an understanding of the client's internal control and documenting the understanding provide documentation of the risk assessment


What reduces CR

Cr is reduced when the auditor determines that the client's control's if operating effectively would reduce the RMM and through tests of control are in place and operating effectively


What is included in an auditor's report based on a PCAOB examination of I/C

- Title - Independent
- Management resp for I/C
- Management assertion on I/C
Auditor's responsibility
*report on I/c or management assertion of I/C
- Examination was done with AICPA attestation standards
- include reasonable assurance
- the exam supports an opinion
- definition of I/C
- Inherent limitations
Signature, date, city, state



ordering equipment and receiving and inspection involve custody - what does this make this

incompatible - poor segregation of duties