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Auditors Report
| Question | Answer |
|---|---|
| What should be included for the Auditor's address? | The City and State where located |
| What is Management Responsible for in regards to the Financial Statements? | Preparation and Fair Presentation of Financial Statements in accordance with the Applicable Financial Reporting Framework |
| What is Management Responsible for in regards to Internal Control? | Internal Control Design, Implementation, Maintenance |
| What are the headings in the Audit Report for an Unmodified Opinion? | (TIM-AA) Title; Introduction; Management Responsibility; Auditor Responsibility; Audit Opinion |
| What are the headings in the Audit Report for an Modified Opinion? | (TIMA-BA) Title; Introduction; Management Responsibility; Auditor Responsibility; Basis for (Modified) Opinion; Audit Opinion |
| In an Unmodified Opinion with Emphasis-of-Matter / Other-Matter sections, what is the order of the headings? | (TIM-AA EMO) Title; Introduction; Management Responsibility; Auditor Responsibility; Audit Opinion; Emphasis-of-Matter; Other-Matter |
| What are the requirements for referencing a Component Auditor in the Audit Report? | Component Financial Statements must be prepared using same Financial Reporting Framework as the Group Financial Statements; Component Auditor must have performed audit in accordance with GAAS or PCAOB Standards. |
| What must the Group Engagement Partner do if they assume responsibility for the Component Auditor's work? | Perform additional audit procedures; Be involved in Component Auditors work; Perform Risk Assessment procedures; Assess Risk of Material Misstatement |
| What standards govern SSARS engagements? | Compilations are governed by SSARS (Statements on Standards for Accounting and Review Services) |
| Which clients can have compilation engagements? | Non-SEC (non-public) registrants only. |
| What is a Compilation? | Accountant puts together financial statements with information PROVIDED BY MANAGEMENT. No opinion is expressed and no assurances are given. Independence is not required. |
| What disclosures are required for Compilation engagements? | Disclosures not necessary must state that they are not included |
| What standards govern Review engagements? | SSARS (Statements on Standards for Accounting and Review Services) |
| What type of assurance is given in a Review engagement? | Reviews give limited assurance. |
| What procedures are required for Review engagements? | Analytical procedures are required for reviews. Compare results to documented predictions. |
| What is a Review engagement? | Financial statements are presented with no opinion expressed- and limited assurances are given. Independence is required for a review engagement. |
| What is a Forecast? | A prospective financial statement that uses normal circumstances. General and limited use allowed. |
| What is a Projection? | A prospective financial statement using hypothetical situations. Only limited use by the client is allowed. |
| What are the requirements for Agreed Upon Procedures? | Independence is required; Only limited use by the client is allowed. |
| What disclosures are required for remote likelihood of losses? | No disclosure required. |
| What disclosure is required for a probable loss contingency? | Accrue if estimable. Emphasis-of-Matter paragraph if not estimable. |
| What disclosure is made if a loss contingency is reasonably possible? | Auditor assesses need for Emphasis-of-Matter paragraph based on loss likelihood. |
| How is a gain contingency reported? | Gain contingencies are not reported. |
| How does an immaterial GAAP issue affect the audit opinion? | It doesn't. Opinion is Unmodified. |
| How does a very material GAAP issue affect the Audit Report? | Modified-Adverse Opinion is issued. Emphasis-of-Matter paragraph is added after Opinion paragraph. |
| How do GAS standards compare to GAAS? | GAS is more strict than GAAS. |
| What is required under the Single Audit Act? | An audit performed under governmental auditing standards (GAS). A report on internal control is required. GAAS and GAS don't require the I/C report. |
Created by:
evrobb7
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