Term
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Definition
| How many days after year end do large accelerated filers have to file with the SEC? (greater than $700 million market cap) |
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Term
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Definition
| How many days after year end do accelerated filers have to file with the SEC? (greater than $75 million, less than $700 million market cap) |
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Term
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Definition
| How many days after year end do non accelerated filers have to file with the SEC? (less than $75 million market cap) |
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Term
1. attorney letter
2. mgmt rep letter
3. audit opinion
4. mgmt letter
5. audit committee communications |
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Definition
| major documents at year end |
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Term
revenue and expense accounts
attorney letters
management representations
audit documentation review
subsequent events |
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Definition
| activities between end of year and last day of fieldwork |
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Term
inquiry of clients
minutes of meetings
review contracts/loan agreement
review taxing/governmental agencies
guarantees from bank confirmations
legal services documentation |
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Definition
| procedures for contingent liabilities, hidden liabilities, litigation, claims and assessments |
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Term
| cannot issue audit opinion unless you have management representations letter |
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Definition
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Term
| audit report date (aka audit completion date) |
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Definition
| what is the date of the management representations letter? |
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Term
| alleviates liability on auditors, shows management responsibility for the fairness of the financial statements and fraud program and controls |
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Definition
| purpose of the management representations letter? |
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Term
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Definition
| considers the current period income effects of misstatement |
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Term
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Definition
| considers the aggregate effect of the adjustments on the entity's balance sheet |
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Term
review latest interim financial statements
inquire officers/other executives
read minutes of meetings
obtain attorney letters
obtain mgmt representations letter |
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Definition
| procedures in subsequent period |
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Term
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Definition
| provide new information about conditions existing at balance sheet date |
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Term
| adjust financial statmenets to reflect new information |
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Definition
| What do you do with Type I subsequent events |
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Term
| Type II Subsequent Events |
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Definition
| involve events occurring after balance sheet date |
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Term
disclose in financial statements
(if extreme, prepare pro forma financial statements) |
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Definition
| What to do with Type II subsequent events |
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Term
| Type II subsequent events |
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Definition
| non-recognized subsequent events |
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Term
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Definition
| recognized subsequent events |
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Term
subsequent discovery of facts
omitted procedures
communication with audit committee
management letters |
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Definition
| activities following issuance of auditor's reports |
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Term
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Definition
| a control deficiency that adversely affects the accounting and reporting function such that there is more than a remote likelihood that a more than inconsequential F/S misstatement will not be prevented or detected |
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Term
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Definition
| significant deficiency that results in more than a remote likelihood that a material F/S misstatement will not be prevented or detected |
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Term
| management letters are NOT required under GAAS |
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Definition
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Term
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Definition
| provide recommendations to client for improving effectiveness and efficiency of operations, delivered by auditor to client following audit engagement |
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Term
subseuent discovery of facts
omitted porcedures
communication with those charged with governance
management letters |
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Definition
| review following audit report release date |
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Term
| within 60 days of report release date |
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Definition
| documentation completion date for ALL audits (public and private) |
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Term
1. all audit documentation is reviewed
2. F/S prepared (and footnotes)
3. signed mgmt rep letter by CEO/CFO |
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Definition
| 3 requirements for the earliest the opinion date can be |
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Term
test basis
materiality
significant estimates |
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Definition
| specific references in the scope paragraph of the standard report |
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Term
unqualified opinion
adverse opinion (material weakness)
disclaimer |
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Definition
| types of internal control opinions |
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Term
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Definition
| issued when departure from GAAP is material but not pervasive |
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Term
| circumstance imposed scope limitation |
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Definition
| situation in which matters beyond auditors' and client's control limit procedures performed by the auditor |
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Term
| client imposed scope limitation |
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Definition
| situation in which client specifically limits auditors procedures (use disclaimer) |
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Term
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Definition
| issued when scope limitation material, but not pervasive |
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Term
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Definition
| issued when pervasive scope limitation (usually client imposed) |
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Term
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Definition
| if serious going concern uncertainty, issue |
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Term
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Definition
| allows for unqualified opinions on FS that are not in conformity with GAAP if GAAP would be misleading |
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Term
financial relationships
management relationships |
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Definition
| two general types of relations that can compromise auditors independence |
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Term
qualified
unqualified
disclaimer
adverse |
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Definition
| 4 types of audit opinions |
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Term
1. assess fraud risk
2. design the audit to detect fraud
3. report findings to appropriate persons |
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Definition
| 3 SAS 99 activities that must be performed |
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Term
| nature of audit procedures |
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Definition
| effectiveness of tests; type of procedures preformed; quality of evidence |
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Term
| timing of audit procedures |
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Definition
| when the procedures are performed |
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Term
| extent of the audit procedures |
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Definition
| how many procedures are performed; quantity |
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Term
| early planning stages and wrap up |
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Definition
| when are analytical procedures required during audit engagements? |
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Term
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Definition
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Term
effective internal controls;
increase detection risk |
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Definition
| what can lower assessment of control risk? how does this impact detection risk? |
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Term
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Definition
| are all transactions recorded? moving forward from original source documents to see if recorded in general ledger/FS |
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Term
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Definition
| what management assertion is associated with tracing? |
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Term
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Definition
| taking the accounts/transactions and looking back to determine their original source |
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Term
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Definition
| management assertion associated with vouching |
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Term
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Definition
| auditors' mental attitude and impartiality with respect to the client |
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Term
| independence in appearance |
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Definition
| the extent to which others perceive auditors to be independent |
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Term
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Definition
| the risk that the audit team's procdres will fail to detect a material misstatement |
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Term
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Definition
| the probability that material misstatement will not be prevented or detected on a timely basis by the entity's internal controls |
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Term
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Definition
| the probability that a material misstatement will occur |
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Term
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Definition
| unintentional misstatements or omissions |
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Term
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Definition
| knowingly making material misrepresentations of fact with the intent of inducing someone to believe the falsehood and act on it and thus suffer loss or damage |
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Term
| schedules and analysis to be prepared by the client's employees |
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Definition
| an audit engagement letter should normally included what matters of agreement between the auditor and the client |
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Term
| identifying related parties |
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Definition
| would be performed during planning |
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Term
1. attempt to contact the predecessor auditors
2. evaluate the integrity of management
3. assess the firm's resources to ensure that they are sufficient to permit them to accept the engagement |
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Definition
| prior to accepting a new audit engagement, a public accounting firm should: |
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Term
| performing tests of controls |
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Definition
| major stage of the audit that is closely related to attributes sampling |
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Term
| the expected population deviation rate with probability equal to the risk of over reliance that the population deviation rate is higher |
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Definition
| the interpretation of the upper limit rate of deviation in an attributes sampling application |
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Term
| use attributes sampling in selecting purchase orders for indication of proper authorization |
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Definition
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Term
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Definition
| primary benefit of using non statistical sampling |
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Term
| examine sample items and determine the sample estimate |
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Definition
| step normally performed last in a sampling application |
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Term
| provide objective basis for quantitatively evaluating sampel risk |
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Definition
| an advantage of statistical sampling over non statistical sampling methods is that statistical methods: |
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Term
Compliance
Efficiency and effectiveness
Reliability |
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Definition
| The COSO provides a definition of internal controls which includes the following 3 categories from most important to least important |
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Term
Observation
Inquiry
Document examination
Reperformance |
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Definition
| There are several phases to the auditor’s evaluation of a client’s internal controls. Phase 3 requires that auditors perform tests of controls and reassess risk of material misstatement rely on 4 different testing methods. What are they? |
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Term
Custody
Authorization
Recording
Reconciliation |
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Definition
| List 4 different separation of duties |
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Term
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Definition
| Primary PCAOB assertion for each of the 2 cycles? (Revenue and Collection) |
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