Quiz Mod's 1+2 Flashcards
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
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
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
Engagements
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
Circumstances
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
