Quiz Mods 1-7 Flashcards by leo Gottlieb

Q

If the auditor asses control risk at the maximum during the remaining period, he or she should consider whether the…

A

Effectiveness of certain substantive tests to cover that period will
Be impaired

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Q

Assessing control risk below the maximum is…

A

Not required to have a reasonable basis for extending audit

Conclusions from an interim date to the balance sheet date

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Q

What is not a quality control policy or procedure related to the review work performed by other engagement team members?

A

Summarization of findings from the firm’s annual inspection

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Q

Summarization of findings from the firm’s annual inspection is a…

2) what is it not?

A

Monitoring activity

2) not engagement performance

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Q

A review may include consideration of whether:

The work has been performed in accordance with…

A

Professional standards and applicable regulatory and legal requirements

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Q

A review may include consideration of whether:

Significant findings and…

A

Issues that have been raised for further consideration

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Q

A review may include consideration of whether:

Appropriate consultations have taken place and the resulting…

A

Conclusions have been documented and implemented

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Q

A review may include consideration of whether:

The nature, timing and extent of…

A

Work performed is appropriate and without need for revision

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Q

A review may include consideration of whether:

The work performed supports the…2

A

Conclusions reached and is appropriately documented

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Q

A review may include consideration of whether:

The evidence obtained is…2

A

Sufficient and appropriate to support the report

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Q

A review may include consideration of whether:

The objectives of…

A

The engagement procedures have been achieved

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Q

SAS 62, Special Reports, establishes the generally accepted auditing standards for five broad categories of special reports. It does not include reporting on financial statements…

A

Where there is substantial doubt about an entity’s ability to
continue as a going concern

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Q

The objective of analytical procedures used in the overall review stage of the audit is to…2

A

1 assist the auditor in assessing the conclusions reached and

2 evaluation of overall financial statement presentation

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Q

The sampling unit in a test of controls pertaining to the existence of payroll transactions ordinarily is…

A

A payroll register entry

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Q

The 3 questions that relates to existence of payroll

A

1 does the employee who received the paycheck exist?

2 did this transaction actually occur?

3 do the clock card and W-2 supporting the entry exist?

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Q

The audit procedure that tests existence, that begins with the sample (payroll register entry) would involve…

A

Vouching this entry back through the accounting system to the
source documents

Q

Source documents in the existence of payroll

A

1 employee clock card (time ticket)

2 W-2 form

3 personnel record

Q

1 employee clock card (time ticket)
2 W-2 form
3 personnel record
These documents would be used as the sampling unit in tests of…

A

Completeness and valuation for payroll transactions

Q

Which of the following is not a consideration in accepting or continuing a compilation of review engagement?

A

The firm is able to complete the engagement within the firm’s
Time budget

Q

Matters to consider in accepting or continuing a client engagement include:

Firm personnel have experience with…3

A

1 relevant industries or

2 subject matters or

3 ability to effectively gain the necessary knowledge

Q

Matters to consider in accepting or continuing a client engagement include:

Firm personnel have experience with relevant regulatory or…2

A

1 Reporting requirements

2 or ability to effectively gain necessary competencies

Q

Matters to consider in accepting or continuing a client engagement include:

The firm has sufficent…

A

Personnel with the necessary capabilities and competence

Q

Matters to consider in accepting or continuing a client engagement include:

What is available if needed?

A

Specialists are available if needed

Q

Matters to consider in accepting or continuing a client engagement include:

Individuals meeting the criteria and eligibility requirements to…

A

Perform an engagement quality control review are available,

Where applicable

Matters to consider in accepting or continuing a client engagement include: The firm is able to...

Complete the engagement within the reporting deadline

An auditor's report would be designate a special report when it is issued in connection with...

Compliance with aspects of regulatory requirements related to Audited financial statements

5 different circumstances where auditor's report would be designate a special report

1 FS that are prepared in conformity with comprehensive basis of Accounting other than GAAP 2 specified elements, accounts or items of a FS 3 compliance with aspects of contractual agreements or regulatory Requirements related to audited financial statements 4 financial representations to comply with contractual agreements Or regulatory provisions 5 financial info presented in prescribed forms or schedules that Require prescribed form of auditor's report

In planning an audit, the auditor's knowledge about the design of relevant control activities should be used to...

Identify the types of potential misstatements that could occur

The auditor must first obtain an understanding of the design of the entity's internal controls (the five components of internal control) and then determine if...

The controls have been placed in operation in order to plan the audit

The preliminary understanding of relevant design of controls is to...2

1 identify types of potential misstatements and 2 consider factors that affect the risk of material misstatement

An understanding in the design of controls will also be useful to the auditor later in the audit when...

Designing tests of controls and substantive tests

The auditor evaluates the operating effectiveness of internal controls in order to...

Assess control risk, which should be documented

Assessing the operating efficiency (effectiveness) of internal control is a different step from...

Understanding design of the controls