Audit - ninja

Question 1

Agreed-upon procedures in accordance w SSAES

Answer 1

Report the diff bw agreed upon n audit procedures

Question 2

Violation of SEC or PCAOB

Answer 2

May not prepare or issue any audit report w respect to that issuer

Question 3

Cpa changes engagement to a review ac to SSARS bc scope limitation. Cpa review report should:

Answer 3

1) refer to scope limitation that caused the change

2) describe the auditing procedures that have already been applied

Question 4

Cpa should consider ….. when review extent n nature of the risks to internal controls associated w IT?

Answer 4

1) entity has responded adequately to the risks arising from IT by establishing effective controls
2) maintain integrity of info n security of data

Question 5

Supplemental reporting std for gov’t fin audit?

Answer 5

Cpa should report scope of their testing of compliance w laws n regulations n internal control

Question 6

Perform in a review engagement of a nonissuer’s f/s in ac w SSARS?

Answer 6

Making inquiries of mgmt

Question 7

Both an engagement to compile n to review a nonpublic entity’s f/s

Answer 7

CPA does not contemplate obtaining an understanding of internal control

Question 8

When will auditor expect to find that an entity implemented automated controls to reduce risks of misstatement?

Answer 8

When transactions are high-volume and recurring

Question 9

Cpa may accept this engagement only if:

Answer 9

CPA also performs procedures on Gold’s fin position & results of operations

Question 10

Working paper will generally not include:

lease agreement, working trial balance, internal control flow chart or bond indenture agreement

Answer 10

a working trial balance

Question 11

Prior year’s FS require precessor auditor revision, so as a sucessor auditor you should:

Answer 11

Ask mgmt to arrange a group meeting for the 3 of them

Question 12

Successor auditor should ask client to request predecessor auditor to allow you to review ….. documents?

Answer 12

predecessor’s working papers

Question 13

Predecessor auditor allows successor auditor to review her working paper regarding:

Answer 13

both contingencies and BS accounts

Question 14

communicate materiality to governance? yes or no?

Answer 14

No, only if mgmt creates troubles

Question 15

communicate pay rate and hours with governance? yes or no

Answer 15

no, that is in the engagement letter

Question 16

4 matters that communicated to those in charge of governance:

Answer 16

1) Auditor’s Resp in relation to FS audit
2) Planned Scope & Timing of Audit
3) Sig. timing of audit
4) Auditor Independence

Question 17

All independence issues have to communicate to governance in oral or writing?

Answer 17

writing

Question 18

What is most likely to be found on review on client’s cut off period for sales?

Answer 18

unrecorded sales at year-end

Question 19

Those charge with governance means:

Answer 19

mgmt or subgroup of governance

Question 20

Not require to communicate with those in charge of governance?

Answer 20

degree of reliance auditor placed on mgmt representation letter

Question 21

Good governance will not include:

Answer 21

Mgmt & those who in governance should be kept seperated (never- interwine at all times)

Question 22

The objectives of the audit is to express an unmodified opinion, however, in some circumstance it may prevent us from expressing an unmodified opinion:

Answer 22

Engagement letter

Question 23

Is 3rd party a consideration in agreed-upon procedures?

Answer 23

no

Question 24

reducing attestion risk:

Answer 24

examination of evidences

Question 25

performing only substantive procedures, becuase....?

Answer 25

control policies and procedures are unlikely to pertain the assertion

Question 26

auditor's resp to let audit committee know that any significant deficiency comes to auditor's attention?

Answer 26

yes -(appropriate mgmt to know) through engagement letter

Question 27

engagement letter establishes an understanding of the resp of ...?

Answer 27

auditor

Question 28

auditor must provide reasonable assurance that professional service confirm with professional std by?

Answer 28

maintaining a comprehensive systems of quality control that is suitable to its organizational structure

Question 29

what allow auditor to take an engagement after fiscal year?

Answer 29

remedy of limitation resulting from taking an engagement after fiscal yr, like inventory counting, etc

Question 30

Can an auditor only audit B/S & not other fin reports?

Answer 30

Yes, as long as all fin info is not limited for access.

Question 31

Can auditor audit F/S w/o Cash Flow stmt?

Answer 31

Yes, if auditor qualified the opnion for the omission

Question 32

initial phase of audit, audit discuss what with mgmt?

Answer 32

timing of audit procedures

Question 33

inappropriate to distribute fin projection to?

Answer 33

potential stockholders in an offering stmt

Question 34

will engagement includes evaluation of support for the assumption over projection?

Answer 34

No.

Question 35

substantive testing:

Answer 35

comparing vendor invoices with receiving reports

Question 36

competence of internal auditors:

Answer 36

professional certificates, quality of WP

Question 37

auditor should decline audit when?

Answer 37

client refuse to let cpa contact legal counsel

Question 38

use another auditor work & take another auditor's resp, what should you do?

Answer 38

review WP and reperform audit testing to validate conclusion

Question 39

can auditor share assessment of inherent risk and control risk with internal auditor?

Answer 39

no

Question 40

auditor uses the assessment of material mistatement (inherent risk and control risk) to determine what?

Answer 40

detection risk

Question 41

what would affect NET of auditing procedures when internal auditor works relate to assertion?

Answer 41

assertion relates to fixed assets addition

Question 42

What is SysTrust?

Answer 42

AICPA and CICA (canadian) formed a professional attestation service that offer availability, security & integrity of business system.

Question 43

what is "% coverage rule" of single audit act?

Answer 43

any nonprofit that receive more than 50% of ferderal funding will need to select & test those major projects

Question 44

When entity is low-risk, % of coverage rule reduces to?

Answer 44

25%

Question 45

When there is a mistatement but auditor fails to find it:

Answer 45

Detection risk

Question 46

what provision is it that cpa has to ensure that the client's website meets a certain criteria?

Answer 46

Web Trust, SSAE Stmt on Stds for Attestation Engagement

Question 47

appropriate of audit evidence means?

Answer 47

reliable and relevant

Question 48

both compilation and review, auditor does not have to be...?

Answer 48

understand th internal control

Question 49

OMB requires nonprofit org to have a single audit or specific project audit if it is over $?

Answer 49

$500,000 or more in a yr

Question 50

Which authorization body designs to promulgate attestation std?

Answer 50

Auditing Std Board

Question 51

what is subrecipient?

Answer 51

nonfederal entity that expends federal awards received from a pass-through entity to carry out a federal program

Question 52

what is an important step for initial planning phase for F/S audit?

Answer 52

understanding of risk assessment process

Question 53

Compiled personal unaudited F/S means that the F/S will not be used to obtain credit?

Answer 53

yes

Question 54

F/S sends to related parties directly, what is an example?

Answer 54

sends to a bank to require a loan

Question 55

stmt of revenue and expenses prepared using special purpose framework?

Answer 55

stmt of income - regulatory basis

Question 56

Providing assurance on investmen statistic performance from investment company is a SSAE ?

Answer 56

yes

Question 57

Does auditor requires to know the nonprofit org makes use of the federal award and its distribution?

Answer 57

no

Question 58

Is auditor must document internal control that complies with laws & regulations?

Answer 58

yes

Question 59

inital planning stage for audit?

Answer 59

obtain an understanding on risk assessment process

Question 60

auditor most likely use what to determine the preliminary judgement about materiality?

Answer 60

annualized interim F/S

Question 61

Internal questonaires are used for?

Answer 61

facilitate test of controls

Question 62

always pick the smaller amount for materiality?

Answer 62

yes

Question 63

obtain knowledge of client's industry n environment to?

Answer 63

understand the events and transactions that affects the client's f/s

Question 64

to understand the continue business for the audit planning, the auditor most likely would?

Answer 64

review prior year work paper and client's permanent files

Question 65

what affect the auditability of entity's f/s?

Answer 65

the adequacy of the accounting records

Question 66

you must plan and perform audit of F/S according to GAAS with an attitude of what?

Answer 66

professional skeptism

Question 67

objective of planning stage of the audit?

Answer 67

assess potential misstatement due to frauds

Question 68

ultimate objective of assesssing control risk?

Answer 68

material misstatement will exist in F/S

Question 69

what software extract info from client software?

Answer 69

generalized audit software

Question 70

2 frauds:

Answer 70

missappropriation of assets or fraudulent reporting

Question 71

what reflects the mgmt philosophy and operating styles?

Answer 71

control environment

Question 72

internal control policies and procedures affect?

Answer 72

mgmt financial stmt assertion

Question 73

noncompliance with laws and regulations:

Answer 73

large amount of cash taken out from the bank

Question 74

noncompliance with laws are hard to detect by auditor due to:

Answer 74

it is more operating aspect than accounting aspect