Acct 4335- Ch. 1

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CPA PrimePlus/ElderCare services

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provides assurance to individuals that their elderly family members' needs are being met by institutions and other professionals

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XBRL services

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provides assurance on XBRL-related documents

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effectiveness

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success in meeting stated goals and responsibilities

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efficiency

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success in using to its best advantage the resources available to the department

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Single Audit Act

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requires many state and local governmental entities and nonprofit organizations that receive financial assistance from the federal government to arrange for compliance audits

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1. financial audit
2. compliance audit
3. operational audit
4. integrated audit

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4 types of audits

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agreed-upond procedures engagement

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an attest engagement in which the CPAs agree to perform procedures for a specified party and issue a report that is restricted to use by that party

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American Institute of Certified Public Accountants (AICPA)

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the national professional organization of CPAs engaged in promoting high professional standards to ensure that CPAs serve the public interest

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assertion

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a representation or declaration made by the responsible party, typically management of the entity

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assurance services

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professional services that enhance the quality of information, or its context, for decision makers. many involve some form of attestation

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attest engagement

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an engagement in which the CPAs issue an examination, a review, or an agreed-upon procedures report on subject matter or an assertion about subject matter that is the responsibility of another party

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audit of financial statements

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an examination designed to provide an opinion, the CPA's highest level of assurance that the financial statements follow GAAP, or another acceptable basis of accounting

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business risk (of the client)

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the risk assumed by investors or creditors that is associated with company's survival and profitability

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certified public accountant

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a person licensed by the state to practice public accounting as a profession, based on having passed the Uniform CPA Examination and having met certain educational and experience requirements

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compliance audit

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an audit to measure the compliance of the organizations with some establish criteria

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CPA examination

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a uniform examination administered by AICPA to enable them to issue CPA licenses. it covers the topics of accounting and reporting, auditing, business environment, regulation, and professional responsibilities

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examination

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an attest engagement designed to provide the highest level of assurance that CPAs provide on an assertion

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financial audit

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an audit of the financial accounting information of an organization or segment of the organization

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financial reporting framework

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a set of criteria used to determine measurement, recognition, presentation, and disclosure of all material items appearing in the financial statements

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fraud

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intentional misstatement of financial statement by management, or theft of assets by employees. also referred to as irregularities

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GAAP

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concepts or standards established by such authoritative bodies as the FASB and the GASB and accepted by the accounting profession as essential proper financial reporting

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information risk

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the risk that the information used by investors, creditors, and others to assess business risk is not accurate

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integrated audit

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as required by the Sarbanes-Oxley Act and PCAOB, it includes providing assurance on both the financial statements and internal control over financial reporting. they are required by publicly traded companies in the U.S.

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International Accounting Education Standards Board (IAESB)

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a committee of the International Federation of Accountants, established to develop guidance to improve the standards of accountancy education around the world. it focuses on
1. the essential elements of accreditation, which are education, practical experience, and tests of professional competence
2. the nature and extent of continuing professional education needed by accountants

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International Auditing and Assurance Standards Board (IAASB)

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a committee of the International Federation of Accountant, established to issue standards on auditing and reporting practices to improve the degree of uniformity of auditing practices and related services throughout the world

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International Ethics Standards Board for Accountants (IESBA)

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develop ethical standards and guidance for use by professional accountant. it encourages member bodies to adopt high standards of ethics for their members and promotes food a committee of the International Federation of Accountants, established to develop ethical standards and guidance for use by professional accountants. it encourages member bodies to adopt high standards of ethics for their members and promotes good ethical practices globally. it also fosters international debate on ethical issues faced by accountants

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International Federation of Accountants (IFAC)

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a worldwide organization of national accounting bodies established to help foster a coordinated worldwide accounting profession with harmonized standards

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operational audit

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an analysis of a department or other unit of a business or governmental organization to measure the effectiveness and efficiency of operations

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Public Company Accounting Oversight Board (PCAOB)

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the five-member board established in 2002 to oversee the audit of public (issuer) companies that are subject to the securities laws. it has authority to establish or adopt, or both, rules for auditing, quality control, ethics, independence, and other standards relating to the preparation of audit reports

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review

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an engagement designed to express limited assurance relating to subject matter or an assertion

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Sarbanes-Oxley Act of 2002

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a set of reforms that toughened penalties for corporate fraud, restricted the kinds of consulting CPAs can perform for audit clients, and created the PCAOB to oversee CPAs and public accounting firms

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Securities and Exchange Commission (SEC)

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a government agency authorized to regulate companies seeking approval to issue securities for sale to the public

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Statements on Auditing Standards (SASs)

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a series of statements issued by the Auditing Standards Board of the AICPA. generally accepted auditing standards are developed and issued in this form in the context of an audit of financial statements performed by an auditor

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suitable criteria

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-the standards of benchmarks used to measure and present the subject matter against which the CPA evaluates the subject matter
-established or developed by groups opposed of experts that follow due process procedures, including exposure of the prosed criteria for public comment
-must have each of the following attributes
1. objectivity
2. measurability
3. completeness
4. relevance

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1. objectivity
2. measurability
3. completeness
4. relevance

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4 attributes of suitable criteria

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1. examinations
2. reviews
3. agreed-upon procedures

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three forms of engagements