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Flashcards in Engagement Acceptance Deck (13):
1

Who does the external auditor report to and overseen by?

Audit committee

2

Who does the Sarbanes Oxley Act apply to?

Issuers

3

If the client is an issuer, the auditor must perform what type of audit?

Integrated audit

4

What does integrated audit consist of?

Financial statements and internal controls over financial reporting

5

The auditor should assess the following regarding client acceptance?

Firm's ability to meet reporting deadlines, firm's ability to staff the engagement, independence, integrity of client management, and group audits

6

What are the preconditions for an audit?

Applicable financial reporting framework and management responsibilities

7

What are the required contents for an engagement letter?

Objective and scope of the audit, auditor's responsibility, management's responsibilities, statement that because of the inherent limitations of an audit, identification of the applicable financial reporting framework, and reference to the expected form and content of any reports

8

What are the 3 types of fraud?

Financial statement fraud, asset misappropriation, and corruption

9

Should auditor communicate with the predecessor auditor before engagement acceptance?

Yes

10

Is client permission needed in order to contact the predecessor auditor?

Yes

11

Inquiries made to the predecessor auditor should regard?

Management integrity, disagreements with management, reasons for the change, and communication regarding fraud and illegal acts

12

During initial audits, the auditor's responsibility regarding opening balances include?

Gaining appropriate audit evidence about whether opening balances contain misstatements and accounting policies reflected in the opening balances have been consistently applied in the current period, read the most recent financial statements

13

The inability of the auditor to obtain sufficient appropriate audit evidence regarding opening balances may result in what types of opinions?

Qualified or Disclaimer