Cpa Exam (Aud)

Front 1

Consulting Services

Back 1

Practitioner provides advice and/or recommendations

Front 2

Assurance Services

Back 2

Independent professional services that improve the quality of information / context for decision makers

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Other Services

Back 3

Practitioners only role is to assist the client

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SAS

Back 4

Statement on Auditing Standards

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SSARS

Back 5

Statement on Standards for Accounting and Review Services

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SSCS

Back 6

Statement on Standards for Consulting Services

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Attestation - General Standards

Back 7

1. Training and proficiency in attestation

2. Knowledge of subject matter

3. Suitable and available criteria

4. Independence in mental attitude

5. Due professional care

Front 8

Attestation - Standards of Field Work

Back 8

1. Planning and supervision

2. Sufficient evidence

Front 9

Attestation - Standards of Reporting

Back 9

1. Character of Engagement

2. Conclusion about the subject matter

3. Significant reservations

4. Any restrictions on use

Front 10

Auditing - General Standards

Back 10

1. Training and proficiency in auditing

2. Independence in mental attitude

3. Due professional care

Front 11

Auditing - Standards of Field Work

Back 11

1. Planning and supervision

2. Sufficient understanding of internal control

3. Sufficient evidence

Front 12

Auditing - Standards of Reporting

Back 12

1. Conformity with GAAP

2. Principles consistently observed

3. Informative disclosures reasonably adequate

4. Expression of an opinion

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General Accepted Auditing Standards (GAAS)

Back 13

C - Completeness
A - Accuracy
V - Valuation and allocation
E - Existence
C - Cutoff
R - Rights and Obligations
O - Occurrence
C - Classification and understandibility

Front 14

CPA Risk Advisory

Back 14

Managers and investors are concerned about whether entities have identified the full scope of various business risks and taken precautions to mitigate them.

Front 15

ElderCare Services (PrimePlus)

Back 15

ElderCare services assess whether specified goals regarding care for the elderly are being met by various care givers. Services provided to the elderly include accumulation of information, financial management, and assessment of nursing care.

Front 16

SSCS

Back 16

Statement on Standards for Consulting Services

Front 17

Attestation - General Standards

Back 17

1. Training and proficiency in attestation

2. Knowledge of subject matter

3. Suitable and available criteria

4. Independence in mental attitude

5. Due professional Care

Front 18

Attestation - Standards of Field Work

Back 18

1. Planning and supervision

2. Sufficient evidence

Front 19

Attestation - Standards of Reporting

Back 19

1. Character of Engagement

2. Conclusion about the subject matter

3. Significant reservations

4. Any restrictions on use

Front 20

Auditing - General Standards

Back 20

1. Training and proficiency in auditing

2. Independence in mental attitude

3. Due professional care

Front 21

Auditing - Standards of Field Work

Back 21

1. Planning and supervision

2. Sufficient understanding of internal control

3. Sufficient evidence

Front 22

Auditing - Standards of Reporting

Back 22

1. Conformity with GAAP

2. Principles consistently observed

3. Informative disclosures reasonably adequate

4. Expression of an opinion

Front 23

General Accepted Auditing Standards (GAAS)

Back 23

C - Completeness
A - Accuracy
V - Valuation and allocation
E - Existence
C - Cutoff
R - Rights and Obligations
O - Occurrence
C - Classification and understandibility

Front 24

CPA Risk Advisory

Back 24

Managers and investors are concerned about whether entities have identified the full scope of various business risks and taken precautions to mitigate them.

Front 25

ElderCare Services (PrimePlus)

Back 25

ElderCare services assess whether specified goals regarding care for the elderly are being met by various care givers. Services provided to the elderly include accumulation of information, financial management, and assessment of nursing care.

Front 26

CPA Performance Review

Back 26

Evaluates whether an entity's performance measurement system contains relevant and reliable measures for assessing the degree to which the entity's goals and objectives are achieved or how its performance compares to its competitors

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Healthcare Effectiveness

Back 27

Provides assurance about the effectiveness of healthcare services provided by HMOs, hospitals, doctors, and other providers

Front 28

SysTrust

Back 28

Assesses whether an entity's internal information systems provide reliable information for operating and financial decisions.

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SysTrust Criteria

Back 29

1. Online Privacy

2. Security

3. Processing Integrity

4. Availability

5. Confidentiality

Front 30

WebTrust

Back 30

Provides Internet users, including businesses and Internet service providers, assurance about electronic commerce activities

Front 31

Elements of a Quality Control System

Back 31

1. Leadership responsibilities for quality within the firm (the "tone at the top")

2. Relevant ethical requirements

3. Acceptance and continuance of client relationships and specific engagements

4. Human resources

5. Engagement performance

6. Monitoring

Front 32

Quality Control Standards

Back 32

1. A second partner review and approval is required of audit reports

2. The lead auditor and the reviewing partner must be rotated off the audit every 5 years

3. The accounting firm must supervise any associated person with respect to auditing or quality control standards

4. Independence rules have been expeanded by prohibiting the auditor from providing a variety of nonaudit services

5. The client's CEO and CFO must certify the appropriateness of the financial statements and disclosures

6. Penalties for destroying documents to impede an investigation have been expanded

7. Management must assess the effectiveness of internal control and issue a report on its effectiveness

8. The auditor must audit internal control and express an opinion on its effectiveness

Front 33

Analytical Procedures

Back 33

1. Required to be used in planning all financial statement audits

2. Permitted but not required to be applied as substantive tests to achieve an audit objective related to a specific financial statement assertion

3. Required to be used in the final stage of the audit as a review

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Sources of information used to develop analytical procedures

Back 34

1. Fiancial information from comparable prior period(s)

2. Anticipated results, such as budgets or forecasts prepared by management (or others) prior to the end of the period

3. Relationships amont data, such as the interrelations among the balances on the financial statements

4. Comparable information from the client's industry

5. Related nonfinancial information

Front 35

Analytical Procedures Applied in Planning the Audit

Back 35

1. Focus on enhancing the understanding of the business and the transactions and events since the last audit

2. Identify areas that may represent specific audit risks

3. Ordinarily use data aggregated at a high level

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Components of Audit Risk

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1. Inherent Risk

2. Control Risk

3. Detection Risk

Front 37

Audit Risk

Back 37

The risk that an auditor may unknowingly fail to modify the opinion on materially misstated financial statements

Front 38

Inherent Risk

Back 38

The susceptibility of an assertion to material misstatement in the absense of related controls

Front 39

Control Risk

Back 39

The risk that internal control will not prevent or detect on a timely basis a material misstatement that could occur in an assertion

Front 40

Detection Risk

Back 40

The risk that the auditor will not detect a material misstatement that exists in an assertion

Front 41

Fraudulent Financial Reporting

Back 41

Intentional misstatements or omissions to deceive users, such as altering accounting records or documents, misrepresenting or omitting significant information, and misapplying accounting principles

Front 42

Misappropriation of Assets

Back 42

Misstatements resulting from theft, embezzlement, or an action that causes payment for items not received

Front 43

Required Documentation of the Consideration of Fraud

Back 43

1. Planning-stage discussions

2. Procedures for identifying and assessing fraud risks

3. Specific risks identified and the response

4. Reasons for not identifying improper revenue recognition as a fraud risk

5. Results of further addressing management override

6. Responses to other conditions and analytical relationships

7. Fraud communications

Front 44

Analytical Procedures

Back 44

Evaluations of financial information made by a study of plausible relationships among both financial and nonfinancial data using models that range from simple to complex

Front 45

FVMD

Back 45

Fair Value Measurements and Disclosures

Front 46

Considerations when assessing the competence of Internal Auditors

Back 46

1. Education level, professional experience

2. Certification, continuing education

3. Policies, programs, procedures

4. Practices regarding assignment of staff

5. Supervision, review of activities

6. Quality of documentation, reports, recommendations

7. Performance evaluation

Front 47

Considerations when assessing the objectivity of Internal Auditors

Back 47

1. Organizational status of director of internal auditing

2. Policies to maintain objectivity

Front 48

CRIME

Back 48

C - Control Activities
R - Risk Assessment
I - Information & Communication
M - Montitoring
E - Control Environment

Front 49

Control Activities

Back 49

Policies and procedures that help ensure that management directives are carried out

1. Performance Reviews
2. Information Processing
3. Physical Controls
4. Segregation of Duties

Front 50

Risk Assessment

Back 50

Entity's identification and analysis of relevant risks as a basis for their management

1. Changes in Operating Environment
2. New Personnel
3. New/Revamped Information Systems
4. Rapid Growth
5. New Technology
6. New Business Models, Products or Activities
7. Corporate Restructuring
8. Foreign Operations
9. Accounting Pronouncements

Front 51

Information & Communication

Back 51

Support the identification, capture, and exchange of information in a form and time frame that enable people to carry out their responsibilities

Consists of:
1. Physical hardware elements (infrastructure)
2. People
3. Software
4. Data
5. Manual and Automated procedures

Often uses IT extensively

Front 52

Information System

Back 52

1. Identifies and records valid transactions
2. Describes transactions for proper classification
3. Measures transactions
4. Determines the proper reporting period
5. Identifies proper disclosures related to transactions

Front 53

Monitoring

Back 53

Process that assesses the quality of internal control performance over time

1. Timely assessment of internal control.
2. Taking of corrective action

Front 54

Control Environment

Back 54

Sets the tone of an organization, influencing the control consciousness of its people

1. Integrity, ethical values
2. Commitment to competence
3. Participation of those charged with governance
4. Management philosophy and operating style
5. Organization structure
6. Assignment of authority, responsibilty
7. Human resource policies and practices

Front 55

Limitations of Internal Control

Back 55

1. Human judgement is faulty
2. Controls can be circumvented by collusion
3. Management may inappropriately override internal control
4. Corporate governance, effective control environment are not absolute deterrents to fraud
5. Costs should not exceed benefits

Front 56

Results of IT

Back 56

1. Greater effectiveness and efficiency of internal control
a. Permits consistent application
b. Improves quality of information
c. Permits additional analysis
d. Improves monitoring of activities, policies, and procedures
e. Lessens risk of circumvention
f. Implements security controls in applications, databases, and operating systems that segregate duties

Front 57

IT Risks

Back 57

1. Reliance on faulty systems/programs
2. Unauthorized access leading to destruction of data
3. Inaccurate recording of transactions
4. Unauthorized changes in master files, systems, or programs
5. Failure to make necessary changes in systems or programs
6. Inappropriate manual intervention
7. Loss of data

Front 58

Computer System

Back 58

Hardware - Physical aspects such as CPUs, servers, or workstations

Software - Operating systems, applications, and security programs

Front 59

LAN

Back 59

Local Area Network

Front 60

WAN

Back 60

Wide Area Network

Front 61

General Controls

Back 61

Relate to all computer activities

Front 62

Application Controls

Back 62

Relate to specific tasks performed by the system

Front 63

Examples of General Controls

Back 63

1. Data center operations
2. Systems software acquisition and maintenance
3. Access security
4. Application system development and maintenance

Front 64

Exampels of Application Controls

Back 64

1. Input
2. Processing
3. Output

Front 65

Organzational Structure

Back 65

1. Computer processing function is treated as a service department
2. Department is independent of users
3. Department reports to senior-level management
4. Department does not have asset custody function
5. Department has no transactional authority

Front 66

Input Controls

Back 66

1. Error Listing
2. Field Checks
3. Record Count
4. Financial Total
5. Hash Totals
6. Reasonableness, Limit, Range checks
7. Preformatting
8. Check digits
9. Sequence checks
10. Sign checks
11. Validity checks

Front 67

Hash Total

Back 67

Used to verify the completeness of data (without defined meaning)

Front 68

Field Checks

Back 68

Test the characters in a field to verify that they are of an appropriate type for that field

Front 69

Check Digits

Back 69

Used to detect incorrect identification numbers

Front 70

Narrative Memorandum

Back 70

Written description of the process, flow of documents, and control points

Front 71

Decision Table

Back 71

Identifies, in matrix form, the contingencies considered in the description of a problem and the appropriate actions taken relative to the contingency

Front 72

Attestation or Auditing?

Training & proficiency in attestation

Back 72

Attestation

Front 73

Attestation or Auditing?

Knowledge of subject matter

Back 73

Attestation

Front 74

Attestation or Auditing?

Suitable & available criteria

Back 74

Attestation

Front 75

Attestation or Auditing?

Independence in mental attitude

Back 75

Both

Front 76

Attestation or Auditing?

Planning & supervision

Back 76

Both

Front 77

Attestation or Auditing?

Sufficient understanding of internal control

Back 77

Auditing

Front 78

Attestation or Auditing?

Sufficient evidence

Back 78

Both

Front 79

Attestation or Auditing?

Character of engagement

Back 79

Attestation

Front 80

Attestation or Auditing?

Conclusion about the subject matter

Back 80

Attestation

Front 81

Conformity with GAAP

Back 81

Auditing

Front 82

Attestation or Auditing?

Principles consistently observed

Back 82

Auditing

Front 83

Attestation or Auditing?

Informative disclosures reasonably adequate

Back 83

Auditing

Front 84

Attestation or Auditing?

Significant reservations

Back 84

Attestation

Front 85

Attestation or Auditing?

Expression of an opinion

Back 85

Auditing

Front 86

Attestation or Auditing?

Any restrictions on use

Back 86

Attestation

Front 87

Attestation or Auditing?

Training & proficiency in auditing

Back 87

Auditing

Front 88

Echo Check

Back 88

Verify that a hardware device is working properly

Front 89

Digital Signatures

Back 89

Form of encryption technology used by businesses to authenticate documents

Front 90

Device Authorization Table

Back 90

Restricts access to those physical devices that should logically need access (Compatibility Test)

Front 91

Management Responsibilities for Control Over Revenue Cycle

Back 91

1. Proper acceptance of order
2. Granting credit approval with correct credit limits
3. Safeguarding assets
4. Timely shipment
5. Billing for shipments at authorized prices
6. Accounting for, collection of receivables
7. Cash, checks received are recorded, safeguarded, deposited intact