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12 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Components of QC system?
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1. Independence, Intergrity & Objectivity.
2. Personnel Mngmt 3. Acceptance and continuance of clients 4. Engagemnt performance 5. Monitoring |
PIEAM
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What are some appropriate audit planning proc's?
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1. Understand clients business
2. Review I/C 3. Determine Audit Strategy 4. Prelimary ananlytic review 5. Determine materiality factor. 6. Review Prior yrs w/p's 7. Consider use of a specialist. 8. Admin matters 9. Nature of audit report |
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What are the main elements of an engagement letter?
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1. Examination & review period
2. Fees and expenses 3. Audit Guidelines (GAAS) 4. Reqd client assistance 5. Disclosure and special reports 6. Clarify the following: f/s are representations of mngmnt and the purpose of the audit is not to disclose defiencies or fraud. |
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What are the auditor's responsibility in relation to staffing and supervision.
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1. Staffed by trained personnel.
2. Review work of assistants |
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Examples of supervising staff?
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1. Instructing Assistants
2. Staying abreast of audit results. 3. Reviewing w/p's |
IRS
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Why does an auditor attempt to gain an understanding of the cliets business during the audit planning phase?
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It assists the auditor in determining necessary controls and assessing control risk.
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How does an auditor obtain a general understanding of a potential client and its industry.
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1. Read AICPA audit and accting guides and technical publications.
2. Tour the clients place of business and communicate with predessor auditor, audit committee, lawyers and other professionals. 3. Upon conclusion of this process, prepare a proposal, and if accepted draft an engagement letter. |
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How should an indepedent auditor evaluate the competence of the client's internal auditor's?
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1. Competence
2. Objectivity 3. Evaluations |
CEO
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Define Mat'l Misstatement
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Material Misstatement is an error which would be considered important to the readers of the f/s.
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Define audit risk?
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The risk that a MM to a financial statement assertion may exist and the auditor will fail to modify the opinion.
AR = IR x CR x DR |
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Why does DR always exist in an audit performed under GAAS?
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Because you're not auditing all the accounts or 100% of the transactions making up an acct bal.
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Define W/P's?
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W/P's are documentation of audit proc's performed by the auditor. they give support to the auditors opinion, document compliance with fieldwork standards and serve as a reference mat'l for future years.
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