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Flashcards in Deck 24 Deck (20):
1

When expressing an _____ opinion the auditor will generally not refer to the work or the findings of a specialist

Unmodified (Auditor will make reference to specialist when there is a departure from an unmodified opinion)

2

What type of evidence is among the most reliable?

Confirmations (example of external evidence)

3

International Standards on Auditing (ISA) related to internal control communications of non-issuers

- No such thing as material weaknesses; Do not require the report to be restricted (GAAS does); require significant deficiencies to communicated in writing

4

Inadequate disclosure gives what kind of opinion

Qualified or adverse opinion (GAAP problem)

5

When an auditor is unable to apply necessary procedures or unable to obtain evidence, what opinion is necessary?

Qualified or disclaimer (GAAS problem)

6

When auditing according to Government auditing standards, an auditor is to report on:

the scope of the testing of compliance with laws and regulations

7

Differences between IFAC and AICPA services

A firm is permitted to act in an advocacy role under IFAC but this impairs independence under AICPA; IFAC: not allowed to provide bookkeeping services, allowed under AICPA;

8

Scope limitation on internal control requires what kind of opinion:

Disclaimer of opinion or withdraw

9

What opinion is needed when a client omits required supplementary information (required by sec, not gaap)?

unmodified opinion with other matter paragraph

10

Type 1 Report on internal controls should include what?

Managements description of the service organizations system

11

Type II report on internal controls provides what?

Operating effectiveness of the internal controls

12

Test data

Use clients application program to process a set of test data; auditor already knows the results

13

Parallel simulation

Writing a computer program that duplicates the logic of a client's program, using identical data

14

Integrated test facility

Utilizes dummy accounts; test data is commingled with live data

15

Example of an overall response

Providing more supervision during an audit of a nonissuer

16

When will an auditor refer to the work of a specialist?

When there is a departure from an unmodified opinion; the auditor may need permission from the specialist

17

Why does an auditor review a client's sales cut-off?

Detect unrecorded sales at year end

18

What would an auditor most likely perform in searching for unrecorded payables?

compare cash payments made made after the balance sheet date with the accounts payable trial balance

19

Net realizable value

= AR - AFDA

20

What yields the most reliable evidence?

Auditor's direct personal knowledge (Ex: observation, recalculation, examination, inspection); next would be external evidence