Day 21 Flashcards
(41 cards)
When are Compiled FS that omit GAAP disclosures acceptable?
- FS are otherwise in conformity with GAAP
- FS would not be misleading to the user
- Compilation report warns the user of the missing disclosures
MCQ-07130
When does an auditor assess control risk high?
- there are no effective controls relating to the assertion
- Implemented controls are not operating effectively
- it would not be efficient to test the operating effectiveness of controls
MCQ-07130
What should the auditor do when control risk is assessed at the maximum level?
Document the assessment
MCQ-07130
What is a characteristic of nonstatistical sampling?
It requires judgement to select a sample
MCQ-12560
What is a characteristic of statistical sampling?
It requires each item to have an equal probability of being selected
MCQ-12560
What is the primary objective of a review of interim financial information is to provide the accountant with a basis for?
Reporting whether material modification should be made for such information to conform with GAAP
MCQ-03749
“U LIAR CPA”
Understand
Learn
Inquiry
Analytical
Review
Client Rep. Letter
Professional judgement
Auditor communicates results
MCQ-03749
True or False: Each page of the Review of Interim Financials should be marked “Unaudited”?
True
MCQ-03749
In an Attribute Sampling application, what affects the sample size?
- Allowable Risk of assessing control risk too low (Indirect)
- Tolerable Deviation Rate (Indirect)
- Expected Deviation Rate (Direct)
MCQ-02586
Nonissuer: What deficiency’s should be communicated to Mgmt in writing?
- Control Deficiency
- Significant Deficiency
- Material Weakness
MCQ-03798
Nonissuer: What is the only deficiency that can be communicated within 60 days of the report release date?
Control Deficiency
MCQ-03798
What should the auditor do when engaged to compile FS of a Nonissuer in the CY when PY was reviewed and the Nonissuer is presenting the FS in comparative form?
All of these answers are correct:
1. Issue a compilation report with an extra paragraph describing the responsibility assumed for PY and include a stmt that “No review procedures were performed after the date of the review report”
2. Issue two separate reports, Compilation Report for CY and Review Report for PY
3. Issue a combined report including both full reports and a stmt that “No review procedures were performed after the date of the review report”
MCQ-04445
Name the procedures used to identify Subsequent Events: “PRIME”
Post Balance Sheet Transactions
Representation Letter
Inquiry
Minutes
Examine
MCQ-11110
When an accountant examines projected FS, the accountant’s report should include a separate paragraph that:
Describes the limitations on the usefulness of the presentation.
- Projected FS SHOULD include a stmt that “projected results may not be achieved”
- Projected FS SHOULD include a stmt that “there will usually be differences between the forecasted and actual result”
MCQ-02502
When auditing an entity’s FS in accordance with Government Auditing Standards, an auditor should prepare a written report on the auditor’s:
Understanding of internal control and assessment of control risk
MCQ-03610
What is the relationship between Expected Deviation Rate and Sample Size?
DIRECT
MCQ-02611
An entity’s internal control requires all check requests have an approved voucher, supported by a prenumbered PO, and a prenumbered Receiving Report.
What population of documents would the auditor select from to determine if any checks were issued for unauthorized expenses?
Canceled Checks
MCQ-02934
What paragraphs would the auditor modify in a Qualified Opinion due to a scope limitation and a Qualified Opinion due to a departure from GAAP?
Opinion Section and the Basis for Opinion sections would be modified
MCQ-14986
On receiving the client’s bank cutoff stmt, an auditor would most likely trace PY _____ listed in the Bank Cutoff Stmt to the YE _____.
PY checks listed in the Bank Cutoff Stmt to the YE Outstanding Checklist
NOTE: Bank cutoff stmts include transactions 10 to 15 days after YE. The outstanding checks and deposits on the Bank Rec. should agree to the Bank Cutoff Stmt
MCQ-02574
True or False: PCAOB Standards require a CPA to perform an Integrated Audit, which includes audits of both the FS and an audit on the effectiveness of Internal Control
TRUE
MCQ-05612
What standards/guidance applies: Compiling an individual’s personal FS to be used to obtain a mortgage.
SSARS
MCQ-06325
What is a characteristic that distinguishes computer processing from manual processing?
Computer processing virtually eliminates the occurrence of computational error normally associated with manual processing.
MCQ-03062
In a FS Audit, GAGAS require a report on internal controls over ______, NOT a report on internal controls over ______
- Financial Reporting
- Compliance (No opinion/no operating effectiveness)
MCQ-03582
An Auditor has been engaged to conduct a performance audit of a governmental entity in accordance with GAS. GAS does not require the auditor’s report to include an ______? (Opposite of FS Audit)
GAS does not require an Opinion on the FS taken as a whole
MCQ-03582
