MNEMONICS Flashcards
(24 cards)
MR DIM REPPORTS CRAME
Unmodified audit opinion: Management's, Responsibility, Design, Implementation, Maintenance, Auditor's responsibility, Express an opinion, Plan and perform, Perfroming procedures, Obtain audit evidence, assessment of Risk of material mistatement, consider inTernal control(TEST), relevant to the financial Statements, not to express an opinion on internal Control, Reasonableness of, significant Accounting estimates, made by Management, and Evaluate the presentation of the financial statements.
ADMITS
Procedures used to assess going concern:
Analytical procedures, Debt compliance, Minutes, Third party confirmations, Subsequent events review
FINE
Conditions and events indicative of a going concern issue:
Financial difficulties, Internal matters, Negative trends, External matters
PPPP
Mitigation factors of a going concern issue:
Plans to borrow money or restructure debt, Plans to sell assets, Plans to delay or reduce expenditures, Plans to increase ownership equity(sell stock)
DORCS
Disclosures required in an other matters paragraph when changing a prior opinion:
Date of the previous report, Opinion of the previous report, Reasons for the prior opinion, Changes that have occurred, Statement that “the opinion…has changed”
PRIME
Subsequent events procedures:
Post balance sheet transactions, Rep letter from management, Inquiry of management(sometimes legal counsel), Minutes, Examine latest interim financial statements
DAR
Additional steps to prevent further reliance on an audit opinion:
Disassociate, Alert agencies and Relying parties
STAFF
Required understandings to have an understanding of a client’s business:
Staff qualifications, Transaction types and frequencies, Accounting basis used for the financial statements, Form of the accounting records, Financial statements form and content
MR SAG CES NAG ACE
Standard compilation report:
Management, Responsibility, for the financial Statements, in accordance with Accounting principles, Generally accepted in the US, we did Not, Audit, or verify the Accuracy, or Completeness, and do not Express and opinion or any form of assurance
U LIAR CPA
Review performance requirements:
Understanding with the client, Learn and/or obtain knowledge of the entity’s business, Inquiry of management with financial and accounting responsibilities, Analytical procedures, Review - other procedures, Client rep letter from management, Professional judgement, Accountant (CPA) should communicate results
RAM SAD MR DIM AR SAL AC NAM
Standard review report:
Reviewed the financial statements, Analytical procedures, Making inquiries of managements, Substantially less in scope, than an Audit, we Do not express an opinion, Management’s, Responsibility, Design, Implement, Maintain, Auditor’s, Responsibility, conduct a review in accordance with SSARS, AICPA, obtain Limited assurance, Accountant’s, Conclusion, Not, Aware, of any Material modifications.
TIPPY PASSER
Attestation standards:
General Standards: Training and proficiency, Independence, Performance and due care, Professional knowledge, You believe the subject matter is capable of evaluation against criteria suitable and available to users,
Fieldwork standards: Planning and supervision, Appropriate sufficient(and relevant) evidence,
Reporting standards: Subject matter and character of the engagement is identified, Substantial reservations of the engagement are disclosed, Express conclusions, Restrict use when necessary
I AM SURE
Conditions required to perform an agreed-upon procedures engagement:
Independence, Agreement of parties, Measurability and consistency, Sufficiency of procedures is the responsibility of specified parties, Use of the report is restricted to specified parties, Responsibility for the subject matter is the client’s, Engagements for prospective financial statements must include a summary of significant assumptions
COVER U
Management assertions of financial statements:
Completeness, cutOff, Valuation allocation and accuracy, Existence and occurrence, Rights and obligations, Understandability and classification
NET
The elements of further audit procedures adjusted in response to the assessed level of risk:
Nature, Extent, Timing
IM A CPA
Steps of assessing the risk of material misstatement:
Internal control, entity, and environment - obtain an understanding, Material misstatement - assess the risk, Assed level of risk - respond with NET, Control testing - operating effectiveness, Perform substantive procedures, Audit evidence - evaluate appropriateness and sufficiency
CRIME
COSO components of internal control:
Control environment, Risk assessment, Information and communication systems, Monitoring, Existing control activities
PAID TIPS
Existing control activities that are relevant to an audit:
Prenumbering of documents, Authorization of transactions, Independent checks to maintain asset accountability, Documentation, Timely and appropriate performance reviews, Information processing controls, Physical controls for safeguarding assets, Segregation of duties
ARC
Segregation of duties:
Authority, Reporting, Custody
FIND
Acceptable types of documentation of the auditor’s understanding of internal controls:
Flowcharts, Internal control questionnaire or checklist, Narrative, Documentation from the client.
COPAL
It segregation of duties:
Control group, Operators, Programmers, Analysts(system), Librarian
AEIO
Hierarchy of audit evidence:
Auditor knowledge, External evidence, Internal evidence, Oral evidence
FIVE CARROT CARS
Audit procedures used in every audit:
Footing, Inquiry, Vouching, Examination, Confirmation, Analytical procedures, Reperformance, Reconciliation, Observation, Tracing, Cutoff review, Auditing related accounts simultaneously, Rep letter, Subsequent events review
HELP ME
Quality control elements:
Human resources, Engagement/client acceptence and continuance, Leadership responsibilities, Performance of the engagement, Monitoring, Ethical requirements
