AUD 1 Flashcards
A member in public practice may not sign a current-year audit report if it has unpaid fees from the client for services provided more than one year prior.
A member in public practice may not sign a current-year audit report if it has unpaid fees from the client for services provided more than one year prior.
The FASB establishes accounting standards. PCAOB establishes auditing standards.
The FASB establishes accounting standards. PCAOB establishes auditing standards.
The role of advisor to a client’s board is not forbidden by AICPA independence rules.
The role of advisor to a client’s board is not forbidden by AICPA independence rules.
In a review, an accountant is required to perform inquiry and analytical review procedures.
In a review, an accountant is required to perform inquiry and analytical review procedures.
Private companies don’t have to adhere to the one-audit-cycle waiting period before going from being a clients auditor to working for the client. SOX would require it if it were a public company audit client.
Private companies don’t have to adhere to the one-audit-cycle waiting period before going from being a clients auditor to working for the client. SOX would require it if it were a public company audit client.
an accountant may issue a review report on one financial statement and not on the other related statements if the scope of the inquiry and analytical procedures has not been restricted.
an accountant may issue a review report on one financial statement and not on the other related statements if the scope of the inquiry and analytical procedures has not been restricted.
AICPA Professional Standards (specifically, AU-C 520.A8) list 4 factors that determine the effectiveness and efficiency of analytical procedures used for substantive purposes: (1) the nature of the assertion, (2) the plausibility and predictability of the relationship, (3) the availability and reliability of the data used to develop the expectation, and (4) the precision of the expectation.
AICPA Professional Standards (specifically, AU-C 520.A8) list 4 factors that determine the effectiveness and efficiency of analytical procedures used for substantive purposes: (1) the nature of the assertion, (2) the plausibility and predictability of the relationship, (3) the availability and reliability of the data used to develop the expectation, and (4) the precision of the expectation.
The attest firm itself and/or its employee benefit plan are always “covered members.”
The attest firm itself and/or its employee benefit plan are always “covered members.”
An outside auditor is a Member in Public Practice (MIPP).
A Member in Business (MIB) would be an internal auditor, controller, staff accountant, etc. People who actually work in the business
An outside auditor is a Member in Public Practice (MIPP).
A Member in Business (MIB) would be an internal auditor, controller, staff accountant, etc. People who actually work in the business
Under the AICPA’s clarified auditing standards, generally accepted auditing standards refer to the set of authoritative pronouncements known as Statements on Auditing Standards issued by the Auditing Standards Board.
Under the AICPA’s clarified auditing standards, generally accepted auditing standards refer to the set of authoritative pronouncements known as Statements on Auditing Standards issued by the Auditing Standards Board.
The elements of quality control are: [1] leadership responsibilities for quality within the firm; [2] relevant ethical requirements; [3] acceptance and continuance of client relationships and specific engagements; [4] human resources; [5] monitoring; [6] Engagement Performance
The elements of quality control are: [1] leadership responsibilities for quality within the firm; [2] relevant ethical requirements; [3] acceptance and continuance of client relationships and specific engagements; [4] human resources; [5] monitoring; [6] Engagement Performance
overall audit strategy involves (1) determining the scope of the audit, (2) determining the reporting objectives, and (3) considering various other important factors.
overall audit strategy involves (1) determining the scope of the audit, (2) determining the reporting objectives, and (3) considering various other important factors.
a decrease in acceptable levels of materiality requires the auditor to do one or more of the following: (1) select a more effective auditing procedure, (2) perform auditing procedures closer to the balance sheet date, or (3) increase the extent of a particular auditing procedure. By increasing the extent of a procedure concerning an individual account and/or selecting a more effective procedure, the auditor will find the smaller misstatements that in aggregate might exceed his preliminary judgments about materiality. The auditor, therefore, should plan to find smaller misstatements as a lower acceptable level of materiality is established.
a decrease in acceptable levels of materiality requires the auditor to do one or more of the following: (1) select a more effective auditing procedure, (2) perform auditing procedures closer to the balance sheet date, or (3) increase the extent of a particular auditing procedure. By increasing the extent of a procedure concerning an individual account and/or selecting a more effective procedure, the auditor will find the smaller misstatements that in aggregate might exceed his preliminary judgments about materiality. The auditor, therefore, should plan to find smaller misstatements as a lower acceptable level of materiality is established.
the auditor considers materiality for planning purposes in terms of the smallest, not the largest, aggregate amount of misstatement that could be material to any one of the financial statements.
the auditor considers materiality for planning purposes in terms of the smallest, not the largest, aggregate amount of misstatement that could be material to any one of the financial statements.
control risk and inherent risk exist independently of the financial statement audit, but not detection risk.
control risk and inherent risk exist independently of the financial statement audit, but not detection risk.
