AUD Flashcards
(25 cards)
What are generally accepted auditing standards?
They are measures of the quality of the auditor’s performance, and guide the auditor in the performance of properly planned and executed audit.
Do nonissurers follow PCAOB?
NO
What does “must” mean in auditing?
It indicates an unconditional requirement, which must be followed in all cases in which the requirement is relevant.
What does “should” mean in auditing?
Mandatory requirement
What does “may” & “may” mean in auditing?
not a professional requirement for performane
What is an auditors responsibility?
To express an opinion on the financial statements based on an audit.
What two auditing standards can be conducted together?
GAAS and GAGAS
What type of opinion is included in a modified opinion?
Qualified opinion, adverse opinion or a disclaimer of opinion
What opinion is given if it is material but not pervasive?
Qualified Opinion
What opinion is given if it is material and pervasive?
Adverse Opinion
What opinion is given if there is a scope limitation?
Disclaimer of opinion or a Qualified Opinion. It depends on the materiality.
What is included in the opinion paragraph in an auditor’s report for a nonissuer?
A statement regarding the auditor’s opinion and an indication of the applicable financial reporting framework and its origin.
What section of the auditor’s report includes the nature of the engagement and the specific financial statements covered by the audit?
Opinion
What opinion is given when there is a scope limitation?
Qualified or disclaimer of opinion
What opinion is given when there is inadequate disclosure of material information?
Adverse
What should be included in the Opinion section of an adverse opinion?
A statement that references a separate section disclosing the basis for the opinion.
What is the Basis for Qualified Opinion Section used for?
To give the reasons for the opinion which was made.
Can a scope limitation cause an adverse opnion?
NOPE
What opinion is used when an auditor is not independent?
Disclaimer of opinion
How are the management and auditors responsibility reported in the report on a nonissuer?
Explicitly and Explicitly
How are material weaknesses reported?
They should be reported to management and those charged with governance. It is not disclosed in an emphasis of matter paragraph.
What are Other-Matter paragraphs?
They refer to matters other than those disclosed in the financial stmts
What type of opinion would be provided if the entity has substatial doubt about the issuer’s ability to continue as a going concern with no other significant audit findings?
Unqualified opinion with an explanatory paragraph.
What does an auditor do when the predecessor auditor’s report is not presented?
They should indicate the following items:
1. Stmts were audited by the predecessor and should not be named.
2. The type of opinion expressed by the predecessor auditor and the reason for the modification if it was modified.
3. Nature of any additional paragraphs
4. date of the report
