Deck 27 Flashcards Preview

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Flashcards in Deck 27 Deck (23):

The criteria used for requiring the Single Audit Act is based on:

Expenditures that are greater than $750,000


Which of the following is not true about the 5 components of internal control?

Auditor is required to classify relevant controls into one of the 5 component categories


The internal audit function is part of what internal control component?



Participation of the audit committee is part of what internal control component?

Control environment


Recording the proper monetary value of transactions is part of what internal control component?

information and communication


The international code of ethics for assurance engagements is based on what kind of framework?

Conceptual framework approach, rather than a specific set of rules


Analytical procedures are more likely to be used for what kind of accounts?

Accounts that are predictable


Obtaining confirmation of inventory provides evidence for what assertion?

Existence (Not valuation since dollar values aren't confirmed)


Registered audit firms must communicate what to the audit committee?

Critical accounting policies and practices used


An uncertainty may result in what opinions?

Unmodified, qualified, adverse, and disclaimer


If internal control was evaluated as part of an audit, the auditor must:

Restrict use of the report (Do not have to restrict the use if internal control was evaluated as a separate engagement)


Confirmations may be based on what kind of transactions?

Single transactions rather than entire customer balances


Confirmation does not provide reliable evidence for what assertion?



Distributing paychecks is considered what part of segregation of duties?



What procedure is used to test for completeness for fixed assets?

Review of large items charged to repairs and maintenance


Example of inherent risk

Assertions involving complex calculations have high inherent risk


What effects fraud risk?

Incentives/pressure, opportunities, rationalization


Risks related to sampling include

Risk of incorrect acceptance/rejection; risk of assessing control risk too high/too low


Compliance testing and fieldwork responsibilities (GAS)

Include designing the audit to provide reasonable assurance that 1)the financial statements are free from material misstatements resulting from violations of laws and regulations that have a direct and material effect on the determination of financial statement amounts and 2)material misstatements resulting from noncompliance with contracts or grant agreements have been detected to the extent that such violations or noncompliance have a direct and material effect on the determination of financial statement amounts


Compliance testing and reporting responsibilities (GAS)

Include the requirement to prepare a written report describing the scope and results of compliance testing relative to laws and regulations, inform the audit committee of illegal acts, and inform appropriate levels of management of discovered fraud


Supervisory review, field work responsibilities (GAS)

GAGAS require documentation of supervisory review prior to the report release date for evidence that supports the findings, conclusions and recommendations contained in the audit report


Reports on special purpose frameworks are issued in conjunction with:

Compliance with reporting requirements to be filed with a specific regulatory agency


What procedure would be the most effective reducing attestation risk?

Examination of evidence