Auditing

Front 1

is the accumulation and evaluation
of evidence about information to determine
and report on the degree of correspondence
between the information and established criteria

Back 1

auditing

Front 2

Auditing should be done by a

Back 2

competent, independent

Front 3

is any information used by the auditor
to determine whether the information being
audited is stated in accordance with the
established criteria

Back 3

evidence

Front 4

types of audits

Back 4

operational, compliance, financial statements

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1. The need for independence from clients.
2. The importance of a structure to encourage
competence.
3. The increased litigation risk faced by auditors

Back 5

Three main factors influence the organizational
structure of all firms

Front 6

The purpose is to assist in providing investors
with reliable information upon which to make
investment decisions

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securities and exchange commission

Front 7

Performs the following services for CPAs:
Sets professional requirements
Conducts research
Publishes materials related to services performed

Back 7

aicpa

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is the worldwide organization
for the accountancy profession that works to improve the
uniformity of auditing practices and related services throughout the world

Back 8

ifac

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The standards for compilations and
reviews of financial statements are
called

Back 9

Statements on Standards
for Accounting and Review
Services (SSARS).

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report on the design
of controls

Back 10

type I

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report on the
operating effectiveness
of controls

Back 11

type II

Front 12

stating that nothing
came to the auditor’s attention that would
lead the auditor to believe there was
noncompliance.

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negative assurance

Front 13

1. Report title
2. Audit report address
3. Introductory paragraph
4. Scope paragraph
5. Opinion paragraph
6. Name of CPA firm
7. Audit report date

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parts of standard unqualified audit report

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report can result from
a limitation on the scope of the audit or
failure to follow generally accepted
accounting principles

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qualified opinion

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Auditor believes the financial statements are
not presented fairly in conformity with GAAP

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adverse opinion

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It is issued when the auditor is unable
to be satisfied that the overall financial
statements are fairly presented; can arise only from a lack of knowledge by the auditor

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disclaimer of opinion

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match levels of materiality with type of opinion

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immaterial = unqualified; material = qualified
highly material = disclaimer/adverse

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a situation a person
faces in which a decision must be made
about appropriate behavior

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ethical dilemma

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Professionals should exercise sensitive and
moral judgments in all their activities

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responsibilities

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Members should accept the obligation to act
in a way that will serve and honor the public

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public interest

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Members should perform all responsibilities
with integrity to maintain public confidence

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integrity

Front 22

Members should be objective, independent,
and free of conflicts of interest

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objectivity and independence

Front 23

Members should observe the profession’s
standards and strive to improve competence

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due care

Front 24

A member in public practice should observe
the Code of Professional Conduct

Back 24

scope and nature of services