chapter 1 & 2 Flashcards
(14 cards)
Inherit risk
IH is the risk that an item will be materially misstated if there are no internal controls in place.
Audit risk
(residual risk) refers to the risk that an auditor may issue unqualified report due to the auditor’s failure to detect material misstatement either due to error or fraud
MR DIM REPORTS CRAME
Mgmt responsibilities, [Design, implementation & maintenance], [audit responsibility, express an opinion], [plan], [performing, obtain, risk, internal controls, statement control] [ reasonableness accounting management evaluating
Qualifies “except for GAAP” Material
Accounting policy, presentation, disclosures estimates
Adverse opinion “GAAP” Pervasive
Accounting policy, presentation, disclosures estimates
Disclaimer GAAS [pervasive]
Insufficient evidence, Significant going concern uncertainty, lack of independence
Pervasive
Pervasive effects on FS; are not confined to an specific elements or accounts / is so confined, represent a substantial proportion of FS/are disclosures
REVIEW Updating prior opinions DORCS
Date, opinion type previously issued, reason for the prior opinion, changes that have occurred, statement that the “opinion. Is different”
[REVIEW]UL IAR CPA
Understanding with client should be stablished, learn understanding of business, inquiries, analytical procedures, review , client representation letter, professional judgement & auditor should communicate results
Qualifies “except for GAAS” material
Insufficient evidence
SSAE
Statement on standards for attestation engagements
Agreed upon procedure examples
AUP, prospective FS, internal controls, compliance
5 attestation standards TIPPY
Training & proficiency, independence, procedure [due professional care], professional knowledge, Your believe that the subject matter is capable of evaluation is suitable
4 reporting standards SSER
Identify the subject matter / disclose significant reservations / express conclusions / restrict use of report to specified parties
