Auditor Responsibilities

Question 1

What is an auditor’s primary responsibility for attest services?

Answer 1

To express a conclusion about the reliability of a written assertion

Question 2

What is an auditor’s primary responsibility for consulting services

Answer 2

The auditor helps develop findings, conclusions, and recommendations that are generally only for the use and benefit of the client. The nature of the work is determined between the auditor and the client.

Question 3

What is an auditor’s primary responsibility for consultations?

Answer 3

Provide counsel in a short time frame, based mostly on existing personal knowledge about the client

Question 4

What is an auditor’s primary responsibility for advisory services?

Answer 4

Develop findings, conclusions, and recommendations for client consideration and decision making.

Question 5

What is an auditor’s primary responsibility for implementation services?

Answer 5

Place an action plan into effect

Question 6

What are the five basic responsibilities an auditor has for personal financial planning?

Answer 6

1) Define engagement objectives
2) Plan specific procedures appropriate to the engagement
3) Develop a basis for recommendations
4) Communicate recommendations to the client
5) Identify tasks for taking action on planning decisions

Question 7

What are the three additional (not basic/required) responsibilities an auditor has for personal financial planning?

Answer 7

1) Assist the client to take action on planning decisions
2) Monitor the client’s progress in achieving goals
3) Update the recommendations and help the client revise their planning decisions

Question 8

Under SOX, what are the requirements for an auditor regarding internal control?

Answer 8

The CPA audit firm merely attests to management’s assessment of IC. It is management’s responsibility to establish adequate internal control and management must assess its IC.

Question 9

_____ relates to requirements placed upon the CPAs while conducting an audit

Answer 9

Quality Control

Question 10

T/F

The auditor has a duty to disclose fraud to a successor auditor when the successor auditor makes the appropriate inquiries

Answer 10

TRUE

Question 11

T/F

The auditor has a duty to disclose fraud to a government funding agency from which the client receives financial assistance

Answer 11

TRUE

Question 12

T/F

Under GAAS the auditor is required to document their understanding of the entity’s internal control

Answer 12

TRUE

Question 13

T/F

Under GAAS the auditor is required to determine whether controls are suitably designed to prevent or detect material misstatements

Answer 13

FALSE

They must obtain knowledge of internal controls sufficient to identify types of potential misstatements, but they aren’t required to obtain detailed knowledge, as implied in the question

Question 14

T/F

Under GAAS the auditor is required to determine whether controls are suitably designed to prevent or detect material misstatements

Answer 14

FALSE

They must obtain knowledge of internal controls sufficient to identify types of potential misstatements, but they aren’t required to obtain detailed knowledge, as implied in the question

Question 15

T/F

Au auditor is required to obtain knowledge about the operating effectiveness of controls

Answer 15

FALSE

They only have to do this if they want to assess control risk below the maximum

Question 16

T/F

An auditor is required to obtain knowledge about the design of controls

Answer 16

TRUE

Question 17

Guidance on providing access to or copies of audit documentation to a regulator excludes what group as a regulator?

Answer 17

The IRS

The guidance on this interpretation does NOT apply to requests from the IRS.