Lecture 13 Flashcards Preview

Auditing > Lecture 13 > Flashcards

Flashcards in Lecture 13 Deck (9)
Loading flashcards...
1
Q

Non-audit services =

A

Anything that isn’t external audit

2
Q

3 categories of NAS

A

1) Services required by legislation eg legal/ regulatory/ contractual reports
2) Services most efficient for auditors to provide
3) Services that could be provided by a number of firms

3
Q

Arguments for prohibition of NAS (2)

A
  • Compromises independence >familiarity threat

- Expectation gap

4
Q

Arguments against prohibition of NAS (3)

A
  • Audit committee oversee relationship with auditors and reviews NAS
  • Shareholders can assess NAS
  • ICAEW > adverse effect on underlying quality of audit. Skill/ knowledge sharing/ sophisticated systems
5
Q

Objectives of internal controls (CAFE)

A

Conduct business in orderly manner
ensure Accuracy accounting records & assets safeguarded
Financial information is timely and reliable
Error/ fraud prevented and detected

6
Q

Fundamental principle of internal controls

A

Stronger the control system, the lower the risk of material misstatement

7
Q

ISA 265 =

A

Reporting deficiencies in internal control

8
Q

Reporting deficiencies in internal control

A

Auditor shall communicate in writing signif deficiencies in internal control on a timely basis

9
Q

Significant deficiency in internal control

A

Deficiency of sufficient importance to merit the attention of those charged with governance