Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Cpa-audit > Ch 1-audit Report > Flashcards

Ch 1-audit Report Flashcards

0
Q

Requirement of audit evidence

A

Appropriate 合适

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

US GAAP

A

Encompass the conventions, rules, and procedures necessary to define us accepted accounting practice at a particular time.

Gaap is one of financial reporting frameworks acceptable for prep f/s, IFRS is another one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Conditions that indicate possible fraud

A

Pressure
Opportunity
Rationalization

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Conduct of audit

A

Professional skepticism.

  1. Audit evidence that contradicts
  2. Info that calls into the reliability of documents and response to inquiries
  3. Condition indicate fraud
  4. Conditions suggest need more audit procedures in addition to those required by GAAS.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Ethical requirements

A

Auditors must be independence in both fact and appearance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Professional judgement

A

Need to apply to both planning and performing, When to make decision about:

  • Materiality
  • Audit risk
  • NET of audit procedures
  • Whether SA evidence has been obtained
  • Drawing conclusion based on the audit evidence obtained
  • Evaluate mgmt’s judgements in applying framework
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Weak internal control

A

Does NOT equal averse opinion

Credit card example

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Professional standards

A 
SASs-----AICPA(asb)----nonissuers
SASs------PCAOB---issuers
AS---------PCAOB---issuers
GAGAS---government
SSAE----engagements
SSARS---accounting and review
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Auditor’s responsibility with respect to SAS

A

Generally required to follow the guidance, and should be able to justify any departures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

PCAOB

A

It was established by SOX act of 2002

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Situation that departure from GAAP is permissible

A

When circumstances indicate that a financial presentation in accordance with GAAP would be misleading
( 如果遵循 gaap会误导人，那么可以不遵循GAAP, auditor 要发表unmodified opinion因为不是materially misstated.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Quality control system

A

Consists of policies and procedures designed, implemented, and maintained to ensure that the form complies with professional standards and appropriate legal and regulatory requirements, and any reports issued by cpa firm are appropriate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Auditor’s report( unmodified opinion)

A

Mr DIM
Repports
Crame

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Auditor’s report

A

Mgmt Responsibility
DIM
REPPORTS
CRAME

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Going concern issue

A
  • unmodified opinion, emphasis of matter

- disclaim if going concern uncertainty

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

When to disclaim opinion

A
  • a significant uncertainty
  • a scope limitation
  • lake of independence
  • auditor associated with unaudited financial statements.
16
Q

Qualified (except for) opinion

A

Due to material GAAP departure:

  • inappropriate or misapplied acct policies.
  • inappropriate f/s presentation
  • inadequate disclosure
  • unreasonable acct estimate
17
Q

Undetected misstatements example

US GAAP: disclaim or withdraw

ISA: withdraw

A
  • confirm A/R denied
  • consolidated sub info denied
  • audit restricts
  • inadequate records
  • no mgmt rep letter signed
  • client lawyer denied
18
Q

Going concern

A

Adequate disclosure: unmodified and EOM

Inadequate dis: qualified/ adverse

Significant g/c uncertainty: disclaimer

19
Q

Comparative financial statements

A

Implicitly for consistent application of acct principles, explicitly only if there are issues with consistency.

There are no explicit reference to test basis.

20
Q

Auditing procedures help in identifying conditions and events that may indicate substantial doubt about going concern?

A

Confirming with 3rd parties the details of arrangements to maintain financial support.

21
Q

Company issues financial statements that purport to present financial position but omits the related statement of cash flows

A

Qualified opinion

22
Q

Change prior opinion( eom or other matter paragraph)

A 
Date of the auditor's previous report
Opinion type previously issues
Reason
Changes
Statement
23
Q

Old cpa should do if he decide whether to reissue their report

A
  • Read the statements for the current period
  • compare the statement audited with current period statements
  • obtain letter of rep from the successor auditor
  • obtain a letter of rep from mgmt
24
Q

Unrevised & revised report date

A

Unrevised: original date

Revised: dual date

25
Q

New cpa should do if reports of the predecessor auditor not reissued

A
  • in other matter para
  • audited by predecessor audior, should not be named until the practice was acquired or merge with successor.
  • type of opinion by predecessor, if modified, then reason
  • the nature of any eom or other matter para include in predecessor’s report
  • the date of predecessor auditor’s report
26
Q

What should successor auditor do if prior period financial statement are restated in the current period to confirm with GAAP?

A

The successor auditor should express an unmodified opinion on the updated report on the prior period financial statement.

27
Q

What is comparative f/s?

A

Includes prior year’s statement that were audited by a predecessor auditor whose report is not presented.

28
Q

When does dual date used?

A

When there is a subsequent event occurring after the original date of the auditor’s report, and the auditor wished to extend responsibility only for the one event

29
Q

What is the difference between recognized and nonrecognized event

A

Recognized event– look back–on or before balance sheet date– require f/s adjustment

Nonrecognized event– look forward–after b/s date– footnote disclosure

30
Q

Auditor’s responsible

A

Gr: up to date of audit report

During fieldwork: active responsibility to investigate certain subsequent events.

During subsequent period: PRIME

Post b/s adjustments
Request letter from mgmt
Inquiry
Minutes of stockholders 
Examine latest available interim f/s
31
Q

Auditor’s respon after the original date of the auditor’s report

A

No active responsibility, but if he aware of any info relate to subsequent events before the report release date, should consider adjust f/s or related disclosure

Cpa-audit (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions