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Flashcards in Quiz Mod's 1+2 Deck (33):

Inadvertent violation of the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants...

Do not necessarily compromise compliance with the conceptual framework


Inadvertent violation of the International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants do not necessarily compromise compliance with the conceptual framework, and as such professional accountants should...

Promptly correct the violation and apply safeguards to avoid
Future violations


International standards require an attorney's letter...

Only when an auditor assesses a risk of material misstatement


US auditing standards have a presumptive requirement to send a letter of...

Audit inquiry to attorneys


Both advancement and consultation would be considered in establishing...

CPA firm's quality control policies and procedures


In accordance with Statement on Quality Control Standards 7, A Firm's System of Quality Control, the quality control proficient and procedures applicable to firm's accounting and auditing practice include what 6 elements?

1 leadership responsibilities for quality within firm
2 relevant ethical requirements
3 acceptance and continuance of client relationships and specific
4 human resources
5 engagement performance
6 monitoring


Consideration of the advancement of the audit firm's personnel would be part of...

Human resources element of quality control


The consultation procedures are considered in...

The engagement performance element of quality control


Sections n 103 of SOX Title 1, "Auditing, Quality Control, and Independence Standards and Rules," dictates that...

PCAOB has authority to set, amend, update, and modify auditing,
Quality control and ethics standards


Analytical procedures consist of evaluations of financial information made by study of...

Plausible relationships among both financial and nonfinancial data


A basic premise underlying the application of analytical procedures is that...

Plausible relationships among data may reasonably be expected
To exist

And continue in absence of known conditions to the contrary


Standard cost system is a...

Budgeted unit cost system designed to alert management when
Actual costs of production differ from expected costs


Because a standards cost system is a Budgeted unit cost system designed to alert management when actual costs of production differ from expected costs, the plausible relationships the auditor looks for in analytical procedures...

Have already been established in a standard cost system


An auditor's analytical procedures most likely would be facilitated if the entity...

Uses a standard cost system that produces variance reports


Should a member of a registered public accounting firm that participated on the engagement become employed with the client in a significant accounting position (CEO, CFO, controller, CAO, or equivalent position), the firm is prevented from...

Conducting the audit for a 1 year period


To participate in the issuance of any report of the issuer, public accounting firms must...3

1 register with the PCAOB

2 sign a consent statement

3 comply with request for testimony or the production of documents


PCAOB Rule 3100 requires that public accounting firms...

Comply with all applicable auditing and related professional
Practice standards


Section 409 of SOX Title IV, "Real Time Issuer Disclosures," dictates that...

Issuers disclose to the public on a rapid and current basis any additional info concerning material changes in financial condition
Or operations


Policies and procedures for assigning personnel to engagements ensure that...

Only technically trained and proficient personnel perform the
Audit work


What 3 items are considered in planning and performance of an audit of financial statements?

1 audit risk

2 materiality

3 statistical sampling


Compliance with laws and regulations is...

An audit objective


Assigning personnel to engagements should...

Be an element considered in establishing CPA firm's quality control policiesAnd procedures


The CPA firm must establish a system of quality control designed to provide the firm with...2

1 Reasonable assurance that the firm and its personnel comply
With professional standards and legal requirements

2 firm/engagement partners issue reports appropriate to the


A CPA firm would be reasonably assured of meeting its responsibility to provide services that conform with professional standards by...

Having appropriate system of quality control


The auditor's engagement letter specifies...4

1 what services the auditor will perform
2 state any assistance or restrictions on the audit
3 informs client that auditor cannot guarantee all acts of fraud will
Be discovered
4 management is responsible for maintaining effective internal


As per Section 204 of SOX amends section of the Securities Exchange Act of 1934 by requiring registered public accounting firms to...3

1 communicate to audit committee all critical accounting policies
And practices
2 all alternative accounting treatments
3 all written communications with management


A comfort letter is given to underwriters in connection with...

Securities offerings


A comfort letter is given to underwriters in connection with securities offerings, providing assurance of...

"Reasonable investigation" of financial data in the prospective


A comfort letter would not contain a sentence that refers to...

An audit


A letter of audit inquiry is not...

A standard letter in an audit


A letter of audit inquiry refers to...

Letters written by the auditor to inquire about info needed as
Part of audit evidence to support auditor's opinion on FS


Representation letter AKA management representation letter AKA client representation letter is written by...

Management (not the auditor)


In a representation letter management acknowledges...2

1 it's responsibility for financial statements and internal control

2 states that info given to auditor has been complete and has
Been complied with all contractual obligations