A1 Flashcards
Non issuers vs issuers
non issuers are private
issuers are public
generally accepted auditing standards -
measures of the qualty of the auditors performance and guide the auditor in the performance of a properly planned and executed audit
GAAP-
encompasses the conventions, rules, and procedures necessary to define accepted accounting practice at a particular time
the term “should” presumes
a mandatory requirement and must be followed in all cases in which the requirement is relevant
-performing additional audit procedures designed to improve the reliability of evidence
-using 3rd party confirmations to provide support for managements representations
-corroborating mgmts explanations with a specialist
professional skepticism example:
-appropriate competence and capabilities to perform the audit
-maintaining professional skepticism and exercising professional judgement throughout an audit
-complying with all relevant ethical requirements
responsibilities of an auditor
in order to obtain reasonable assurance the auditor must:
-plan the work and properly supervise assistants
-determine and apply appropriate materiality levels
-identify and assess risks of material misstatement, whether due to fraud or misstatement
-obtain sufficient appropriate audit evidence
modified opinions include:
qualified
adverse
disclaimer
unmodified opinion
represents that financial statements are true and fair value in material respects
unqualified opinion
conclude that financial statements are free from material misstatements
modified opinion
auditor determine the financial statements are materially misstated or the auditor is unable to obtain sufficient appropriate audit evidence
qualified opinion -
states that “except for” the financial statement are presented fairly
adverse opinion
auditors report stating the f/s do not present fairly
disclaimer of opinion
stating the auditor does not express an opinion on the f/s
“In our opinion, except for [reference to matter giving rise to qualification] described in the basis for qualification section of our report…”
qualified opinion phrase
If financial statements including accompanying notes fail to disclose information that is required by GAAP the auditor should express a
qualified or adverse opinion- depending on pervasiveness
elements of quality control:
Human Resources
Engagement/ client acceptance and continuance
Leadership responsibilities
Performance of the Engagement
Monitoring
Ethical Requirements
non issuers require that audit documentation be retained for at least
5 years from the release date
issuers require that audit documentation be retained for at least
7 years from the release date
non issuers require that documentation completion date is
60 days after the report release date
issuers require that documentation completion date is
45 days after the report release date
