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Flashcards in Thursday Quiz Deck (29):

SSARS ordinarily precludes the accountant from downgrading an engagement from an audit under the 2 following circumstances.

1 CPA has been prohibited by the client from corresponding with entity's legal counsel

2 entity refuses to provide the CPA with signed representation


While performing an audit, the auditor should allow for some misstatements of lesser value than the assessed materiality level so that in total the misstatements might not result in a material misstatement to the financial statements. In order to do so, the auditor sets which of the following lower than the materiality level(s)?

Tolerable misstatement


Interpretation No. 1 to AU 339, Audit Documentation, entitled "Providing Access to or Copies of Audit Documentation to a Regulator," contains guidance relating to providing access to or copies of audit documentation to a regulator. Under what circumstances does this apply to an attest engagement?

In all cases, however the letter to the regulator should outline the purpose of regulatory request as understood by the practitioner


"Significant deficiencies and material weaknesses communicated in prior audits that have not yet been remediated need not be communicated" this is an...

Incorrect statement


An employee in the receiving department keyed in a shipment from a remote terminal and inadvertently omitted the purchase order number. The best systems control to detect this error would be a...

Completeness test


Type 1 report, reports on management's description of service organization's system and...

suitability of design of controls


Type 2 report, reports on management's description of service organization's system and...

Suitability of design and operating effectiveness of controls


When a service auditor expresses an opinion on management's description of payroll processor's system and suitability of design of controls (type 1 report). The independent auditor's report should...

Contain a disclaimer of opinion on the operating effectiveness of
The payroll processor's controls


An auditor's Disagreements with management based on preliminary information does...

Not to be communicated to those charged with governance


"After performing our preliminary analytical procedures we will discuss with you he other procedures we consider necessary to complete the engagement." This statement...

Is least likely to appear in auditor's engagement letter


In auditing computer based systems, the integrated test facility is...2

1 a concurrent audit technique where a special set of dummy
master files is established and

2 test transactions are entered to test the programs using the
Dummy files during regular processing runs


SSARS define submission as either...2

manual or computer prepared statements


Which of the following is in the correct order of feedback, feedforward and preventative control systems?

1 Cost accounting variances, 2 cash budgeting
and 3 organizational independence


Which organization's mission is to promote the value of professional accountant's worldwide?

International Federation of Accountant's (IFAC)


Which of the following is a computer assisted audit technique that permits an auditor to insert the auditor's version of a client's program to process data and compare the output with the client's output?

Parallel simulation


When qualifying an opinion because of an insufficiency of audit evidence an auditor should refer to the situation in...

The scope paragraph


"It is appropriate to use calculator tapes with names or explanations
on the tapes rather than writing separate lists onto work papers." This statement is...

A correct statement concerning the content of audit documentation


The firm's management philosophy should be considered when...

Monitoring a firm's accounting and audit practice


What would the following phrase be contained in?

During our audit, we discovered evidence of the company's failure to safeguard inventory from loss, damage, and misappropriation.

Auditor's communication of significant deficiencies to audit


What would the following phrase be contained in?

The company considers the decline in value of equity securities classified as available for sale to be temporary.

Management representation letter


What would the following phrase be contained in?

"Was the difference of opinion on the accrued pension liabilities that existed between the engagement personnel and actuarial specialist resolved in accordance with firm policy and appropriately documented?"

Partner's review work papers


What would the following phrase be contained in?

There have been no communications from regulatory agencies concerning noncompliance with or deficiencies in financial reporting practices.

Representation letter from management


What would the following phrase be contained in?

When the audited provides negative assurance about unaudited financial statements.

Information evaluated against reasonable criteria by a regulatory authority


What would the following phrase be contained in?

The company believes that all material expenditures that have been deferred to future periods will be recoverable.

Representation letter from management


What would the following phrase be contained in?

Our use of professional judgement and the assessment of audit risk and materiality for the purpose of our audit mean that matters may have existed that would have been assessed differently by you. We make no representation as to the sufficiency or appropriateness of the information in our working papers for your purposes.

Communication of predecessor auditor to successor auditor


What would the following phrase be contained in?

Blank checks are maintained in an unlocked cabinet along with the check signing machine. Blank checks and the check signing machine should be locked in separate locations to prevent the embezzlement of funds.

Communication of significant deficiency to audit committee


What would the following phrase be contained in?

Several employees have disabled the anti virus detection software on their PCs because the software slows the processing of data and occasionally rings false alarms. The company should obtain anti virus software that runs continuously at all system entry points and that cannot be disabled by unauthorized personnel.

Communication of significant deficiency to audit committee


What would the following phrase be contained in?

"In planning the sampling application, was appropriate consideration given to the relationship of the sample to the audit objective and to preliminary judgments about materiality levels?"

Partner's review work papers


For the question, "as part of the audit planning process, which of the following inquiries would be made of the predecessor auditor, would include what period in particular?

Includes communication before accepting engagement