Audit Standards and Engagement Planning Flashcards
Compliance Audits
Verifies that you are following laws and regulations. Done by IRS and other governmental units. Can also be done by a CPA to see if bond covenants have been violated.
Operational Audits
Effectiveness/Efficiency/Economy. Audit a department or division of a corporation to see if meeting organizational goals.
Financial Statement Audits
Examination for purpose of giving an objective opinion as to the fairness of financial statement presentations
Who determines the level of materiality?
the auditor
Items within the scope of the audit
items that exceed the level set for materiality.
AFRF
Applicable Financial Reporting Framework
Clarity Standards relate to what type of clients
Non-Issuers (Non-public companies)
Unconditional Requirement
Contains the words “must” or “is required to”
Presumptively mandatory requirement
contains the words “should”. If you do not to it then you must document why you did not do it
10 Generally Accepted Auditing Standards
(TIPPICANOE) or (PID-PIE-GAACDO)
3 General Standards
3 Fieldwork Standards
4 Reporting Standards
TIPPICANOE
Training & Proficiency
Independence
Professional & Due Care
Planning and Supervision
Internal Controls
Corroborative Audit Evidence
Accounting Principles in conformity with GAAP
No new accounting principles used- Consistency
Omitted Informative Disclosures-NONE
Expression of opinion
PID-PIE-GAACDO
Proficient
Independent
Due professional care
Planning
Internal Controls
Evidence
GAAP
Consistency
Disclosures
Opinion
GAAS measures what?
Overall quality of the auditors performance
Auditor must be independent for what types of work?
Attestation engagements (CARES)
Compilations (unless lack of independence is indicated) Agreed-upon procedure engagements Reviews Examinations Special Reports
Auditor need not be independent for?
Compilations (when lack of independence is indicated)
Taxes
Consultations
Other non-attest services such as payroll
