| Question |
Answer |
| What is the general rule for the positioning of the explanatory paragraph for unqualified opinions? |
The explanatory paragraph would generally follow the opinion paragraph. |
| What are the General Standards in GAAS? |
T Training
I Independence
P Professional Care - professional skepticism |
| What are the Standards of Fieldwork in GAAS? |
P Planning and Supervision - adequate plan the work and properly supervise the assistants
I Internal Control, Entity, and Environment
E Evidence |
| What are the Standards of Reporting under GAAS? |
A Accounting = GAAP (Explicit)
C Consistency (Implicit)
D Disclosure (Implicit)
O Express Opinion (Explicit) |
| What is generally included in an auditor's standard report (unqualified opinion)? |
Title
Addressee (to company, stockholders, and board, not management)
Introductory Paragraph
Scope Paragraph
Opinion Paragraph
Firm Name
Report Date |
| What is included in the Introductory Paragraph of an audit report? |
(1) a statement that the financial statements as identified in the report were audited
(2) a statement that the financial statements are the responsibility of management and that the auditor's responsibility is to express an opinion |
| What is included in the Scope Paragraph of an audit report? |
Audit/Accordance to US GAAP (PCAOB - Issuers)
Planned/Performed
Material/Misstatement
Examining/Evidence
Assessing/Accounting Standard
Made/Management (significant estimates) |
| What are some conditions that will lead to a scope limitation in an audit? |
(1) Time Constraints
(2) Inability to obtain sufficient approriate audit evidence
(3) Refusal of mgmt to provide representation for responsibility for the fair representation of financial statements
(4) Refusal of client attorney to respond to inquiry |
| If material outside of the financials are inconsistent with the financials, what are the options an auditor should consider? |
(1) Revise the report to include discussion of the material inconsistency
(2) Withhold the use of the report
(3) Withdraw from the engagement and consult with legal counsel |
| What are the procedures an auditor should take for supplementary information? (1 of 2) |
The auditor should take on limited procedures:
(1) Inquire mgmt how supplementary information was prepared
(2) Determine if the supp. info. is consistent with mgmt's responses, audited financials, and other knowledge
|
| What are the procedures an auditor should take for supplementary information (2 or 2) |
The auditor should take on limited procedures:
(3) Consider whether the client representation letter should refer to the supplementary information |
| Under what circumstances would an auditor be required to express an opinion on supplementary information? |
(1) Required supp. info is omitted
(2) Info is not in compliance with GAAP requirements for proper measure or presentation
(3) The auditor is not able to complete required procedures sup. info.
(4) There is substantial doubt about conformance or requir |
| Required by GAAP, what areas are segment reporting required for? |
(1) Products and services
(2) Geographic areas
(3) Major customers |
| How should an auditor report on condensed financial statements? (1 of 2) |
The auditor must indicate:
(1) that the auditor audited and expressed an opinion on the complete financial statements
(2) the date of the auditor's report on the complete financial statements |
| How should an auditor report on condensed financial statements? (2 of 2) |
The auditor must indicate:
(3) the type of opinion expressed
(4) whether the information in the condensed financial statements is fairly stated, in all material respects, in relation to the financial statements from which it has been derived
|
| What should be included in a reporting accountant's report? (1 of 5) |
(1) a brief description of the nature of the engagement
(2) a statement that the engagement was performed in accordance with AICPA standards |
| What should be included in a reporting accountant's report? (2 of 5) |
(3) an identification of the specific entity a description of the transaction(s), including relevant facts, circumstances, and assumptions, and a statement about the source of the information |
| What should be included in a reporting accountant's report? (3 of 5) |
(4) a statement describing the appropriate accounting principles, (including the country of origin) to be applied or type of opinion that may be rendered and, if appropriate, the reasons for the conclusion |
| What should be included in a reporting accountant's report? (4 of 5) |
(5) a statement that the preparers of the financial statements, who should consult with their continuing accountants, are responsible for proper accounting treatment (mgmt is responsible) |
| What should be included in a reporting accountant's report? (5 of 5) |
(6) a statement that any difference int he facts, circumstances, and assumptions presented may change the report
(7) a separate paragraph at the end of the report restricting its use to specified parites |
Spanish 3
