Audit Engagements

Question 1

what are the 5 steps of an audit process?

Answer 1

1. Engagement acceptance
2. Assess risk and plan response
3. Perform procedures and obtain evidence
4. Form conclusions
5. Reporting

Question 2

In order to obtain reasonable assurance, an auditor must?

Answer 2

a. plan the work and properly supervise any assistants
b. determine and apply appropriate materiality levels
c. identify and assess risks of material misstatement, whether due to error or fraud
d. obtain sufficient appropriate audit evidence

Question 3

what are the management responsibilities?

Answer 3

1. financial statements
2. internal control

Question 4

what are the auditor responsibilities?

Answer 4

1. professional skepticism: questioning mind not judging client lol
2. impediments to acting with professional skepticism
3. ethical requirements = independence
4. professional judgement
5. sufficient appropriate audit evidence and audit risk
6. compliance with GAAS

Question 5

what is an integrated audit?

Answer 5

It includes 2 opinions below and is required for issuers
1. fairness of the financial statements
2. operating effectiveness of internal controls over financial reporting