Trouble Nemonics

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 elements of the Engagement Letter?

Answer 2

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 3

What are the audit planning procedures?

Answer 3

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 4

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

Answer 4

PERCV

Presentation and disclosure

Existence or occurrence

Rights and obligations

Completeness

Valuation or allocation

Question 5

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

Answer 5

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 6

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

Answer 6

POD-IM

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