Flashcards in Review of Interim Financial Information Deck (20)
What are the procedures done when reviewing interim financial information?
Understanding, Learn client, inquiries, analytical procedures, review, client representation letter, professional judgment, and auditor report(U LIAR CPA)
What should an auditor do before accepting an engagment to review an entity's interim financial information?
Obtain the agreement of management that it acknowledges and understands its responsibility of the financial statements and internal control
What should the understanding in the engagement letter include?
Objectives and scope of the engagement, management's responsibilities, auditor's responsibilities, limitations of the engagement, and financial reporting framework
What standards are used involving a review of interim information for an issuer?
SAS or PCAOB
Does a review provide a basis for expressing an opinion?
The auditor needs to have an understanding of the entity and its environment, including its internal control in order to?
Evaluate the likelihood that such misstatements will occur and select appropriate inquiries and analytical procedures
Who should inquiries be directed to?
Members of management
What should inquiries be regarding to?
Whether the interim finncial information has been prepared in conformity with the applicable financial reporting framework and fraud, suspected fraud, or allegations of fraud.
Is inquiry of client's lawyer required?
What should analytical procedures include?
Trends, ratios, budget vs. actual and benchmark and compare to industry standards
What should the auditor do when addressing significant accounting and disclosure matters relating to interim financial information?
Read minutes, obtain reports from any component auditor engaged to review the interim information, obtain evidence that the interim financial information agrees or reconciles with the accounting records, read the interim financial information, read other information in documents, and extend review procedures to resolve any outstanding questions regrading interim financial information
What should the auditor do with misstatement identified?
If the auditor is unable to perform necessary procedures or management does not provide appropriate representations, can a review report be issued?
What should each page in a review report be clearly marked as?
The review report should include?
A section with the heading "Management's Responsibility for the Financial Statements", a section titled "Auditor's Responsibility", and a concluding section stating whether the auditor is aware of any material modifications
Should a statement saying a review of interim financial information is substantially less in scope be included in the review report?
If there are departures from the applicable financial reporting framework, what should the auditor do?
Modify the report
What is added when the report is modified?
Basis for Modification paragraph
When interim financial information included in a note to the financial statements is not marked "unaudited", the auditor would?
Disclaim an opinion on the interim financial information