A1 EXAM LATEST UPDATED GRADED A+
___ ___ is necessary because an audit requires interpretation of ethical requirements
and GAAS, as well as informed decisions based on the application of knowledge and
experience
Examples (when making decisions on):
1) materiality
2) audit risk
3) nature, extent and timing of audit procedures
4) evaluating whether sufficient and appropriate evidence has been obtained
5) evaluating management's judgements
6) drawing conclusions on audit evidence obtained - ANSWER-professional judgement
____ guidance provided by a statement on auditing standards is the most authoritative
of level of auditing guidance for ____ - ANSWER-general; nonissuers
- may be added to the nonissuer report (optional section)
- is added when the client engages the auditor to communicate ____s
- provides visibility into the more complex areas or areas that require judgement in the
audit - ANSWER-KAMs
(issuers) management is responsible for evaluating subsequent events through the date
the financial statements are... - ANSWER-issued or widely distributed
(non-issuers) management is responsible for evaluating subsequent events through the
date the financial statements are... - ANSWER-available to be issued or in a form and
format that complies with GAAP and all approvals for issuance have been obtained
1) auditing interpretations of SAS or PCAOB AS
2) AICPA audit and accounting guides
3) Auditing statement of position
what are these collectively referred to as? - ANSWER-interpretive publications
- recommendations for how auditing standards should be applied (not considered as
actual standards)
1) Journal of Accountancy
2) Professional journals
3) Textbooks
4) CPE courses
what are these collectively referred to as? - ANSWER-other auditing publications (not
authoritative)
, 5 step audit process
- what are the steps? - ANSWER-1) engagement acceptance
2) assess risk and plan response
3) perform procedures and obtain evidence
4) form conclusions
5) reporting
an attitude that the auditor must apply when making professional judgements that
provide the basis for the auditor's actions
auditors should be alert for:
1) audit evidence that contradicts other audit evidence obtained
2) information which calls into question the reliability of documents
3) conditions that indicate possible fraud - ANSWER-professional skepticism
an auditor exercising professional skepticism with respect to the risks of material
misstatement due to fraud will most appropriately consider the ____ of information used
as audit evidence - ANSWER-reliability
an auditor of a nonissuers must conduct the audit in accordance with the ___ standards
- ANSWER-ASB
an auditor who performs work on the financial information of a component that will be
used as audit evidence for the group audit - ANSWER-component auditor
an auditor will normally not add an emphasis-of-matter paragraph for uncertainties that
are appropriately accounted for. However, if a question that the uncertainty is "______"
then an emphasis-of-matter paragraph may be added - ANSWER-unusually important
an emphasis of matter paragraph is included in auditor's reported when required by... -
ANSWER-GAAS
an emphasis or other matter paragraph (is or is not) appropriate for a matter identified
as a key audit matter when the auditor has been engaged to communicate key audit
matters - ANSWER-is not
an emphasis-of-matter paragraph is required when... (CAP) - ANSWER-C - Consistency
(Lack of)
- to describe a justified change in accounting principle that has a material effect on the
entity's financial statements
- to describe a change in the reporting entity that results in financial statements that, in
effect, are those of a different reporting entity
A - Audit opinion change
- subsequently discovered facts lead to a change in audit opinion
___ ___ is necessary because an audit requires interpretation of ethical requirements
and GAAS, as well as informed decisions based on the application of knowledge and
experience
Examples (when making decisions on):
1) materiality
2) audit risk
3) nature, extent and timing of audit procedures
4) evaluating whether sufficient and appropriate evidence has been obtained
5) evaluating management's judgements
6) drawing conclusions on audit evidence obtained - ANSWER-professional judgement
____ guidance provided by a statement on auditing standards is the most authoritative
of level of auditing guidance for ____ - ANSWER-general; nonissuers
- may be added to the nonissuer report (optional section)
- is added when the client engages the auditor to communicate ____s
- provides visibility into the more complex areas or areas that require judgement in the
audit - ANSWER-KAMs
(issuers) management is responsible for evaluating subsequent events through the date
the financial statements are... - ANSWER-issued or widely distributed
(non-issuers) management is responsible for evaluating subsequent events through the
date the financial statements are... - ANSWER-available to be issued or in a form and
format that complies with GAAP and all approvals for issuance have been obtained
1) auditing interpretations of SAS or PCAOB AS
2) AICPA audit and accounting guides
3) Auditing statement of position
what are these collectively referred to as? - ANSWER-interpretive publications
- recommendations for how auditing standards should be applied (not considered as
actual standards)
1) Journal of Accountancy
2) Professional journals
3) Textbooks
4) CPE courses
what are these collectively referred to as? - ANSWER-other auditing publications (not
authoritative)
, 5 step audit process
- what are the steps? - ANSWER-1) engagement acceptance
2) assess risk and plan response
3) perform procedures and obtain evidence
4) form conclusions
5) reporting
an attitude that the auditor must apply when making professional judgements that
provide the basis for the auditor's actions
auditors should be alert for:
1) audit evidence that contradicts other audit evidence obtained
2) information which calls into question the reliability of documents
3) conditions that indicate possible fraud - ANSWER-professional skepticism
an auditor exercising professional skepticism with respect to the risks of material
misstatement due to fraud will most appropriately consider the ____ of information used
as audit evidence - ANSWER-reliability
an auditor of a nonissuers must conduct the audit in accordance with the ___ standards
- ANSWER-ASB
an auditor who performs work on the financial information of a component that will be
used as audit evidence for the group audit - ANSWER-component auditor
an auditor will normally not add an emphasis-of-matter paragraph for uncertainties that
are appropriately accounted for. However, if a question that the uncertainty is "______"
then an emphasis-of-matter paragraph may be added - ANSWER-unusually important
an emphasis of matter paragraph is included in auditor's reported when required by... -
ANSWER-GAAS
an emphasis or other matter paragraph (is or is not) appropriate for a matter identified
as a key audit matter when the auditor has been engaged to communicate key audit
matters - ANSWER-is not
an emphasis-of-matter paragraph is required when... (CAP) - ANSWER-C - Consistency
(Lack of)
- to describe a justified change in accounting principle that has a material effect on the
entity's financial statements
- to describe a change in the reporting entity that results in financial statements that, in
effect, are those of a different reporting entity
A - Audit opinion change
- subsequently discovered facts lead to a change in audit opinion
