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15 Cards in this Set
- Front
- Back
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Reviews consist of....
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analytical procedures, inquiry (not 3rd party), & obtaining written representations from management
Note: no report/test of internal control. |
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SSARS
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Statements on Standards for Accounting & Review Services
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what is included in a compilation report when the accountant lacks independence?
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"I am not independent with respect to company X" is added to the last paragraph.
Note: a reason for lack of independence is NOT required but can be provided |
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compilation of comparative financial statements: what should the cpa do if disclosures are omitted in 1 year?
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cpa should not report on compiled comparative f/s in which one year, but not all years, omit note disclosures.
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What is the relationship between control risk and interim audit procedures?
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audit procedures can be conducted at interim dates if Control Risk for those accounts/transactions is low
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What are the foundations of GAAS?
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materiality & audit risk
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General Standards of GAAS:
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TIP:
training & proficiency independence professional care |
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Standards of fieldwork:
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PIE:
Planning & supervision internal control evidence |
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Standards of reporting
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ACDO:
Accounting =GAAP Consistency Disclosures Opinion |
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Before accepting and engagement the auditor should:
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-review clients f/s
-check for appropriate reporting framework (GAAP/IFRS) -speak to 3rd parties -contact predecessor auditor |
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Audit Risk formula
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AR = Inherent Risk x Control Risk x Detection Risk
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Define Audit Risk
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risk that material mistakes, error or fraud will result in an inaccurate report
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Define Control Risk
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risk that controls will fail to detect error or fraud
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Define detection risk
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risk that the auditor will fail to detect a material misstatement
NOTE: this is the only component of the audit risk formula that the auditor CAN control/adjust |
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An increase in acceptable detection risk has what affect on Substantive testing?
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run less substantive tests
inverse relationship |
