How can we help?

You can also find more resources in our Help Center.

40 terms

Audit- Ch1

Questions from book
STUDY
PLAY
T/F Independent Audits today place more emphasis on sampling than did the audits of 19th century
True
T/F AICPA issues CPA certificates and Permits CPAs to practice
False- They only prepare and grade. State Board of Accountancy issues CPA permits.
T/F A company is either edited by GAO -or- Internal auditors, but not both.
False
T/F The SEC does not pass on the merits of the securities that are registered with the agency.
True
T/F The AICPA has the primary authority to establish accounting standards
False- FASB
T/F An annual peer review is a requirement of the AICPA
False- req. by states
T/F Many small companies elect to have their financial statements audited by a CPA firm, rather than incur the cost of an audit.
True
T/F Staff assistants in CPA firms generally are responsible for planning and coordinating audit engagements.
False- Senior: Daily, Manager: Supervises overall engagement, Partner: Overall Responsibility
T/F SOX requires that auditors of certain publicly traded companies in the U.S. perform an integrated audit that includes providing assurance on both the financial statements and on compliance with laws and regulations
False- financial statements & internal control
Auditing is frequently only a small part of the practice of local CPA firms.
True
Agreed-upon procedures Report:
Summary of Findings
Examination Report:
Audit, high assurance, low attestation risk, & give opinion
Review Report:
Low Assurance, inquiry & analytical procedure
SAS: Statements on Auditing Standards issued by
ASB: Auditing Standards Board
Risk associated with Survival and Profitability
Business Risk
Risk associated with accuracy/ misstatements
Information Risk
Historicall, AICPA has been most concerned with providing..
Professional Standards for CPA's
What org. protects investors and the public by requiring full disclosure of financial info. by companies offering securities to the public is
SEC
Peer Review Engagement
CPA firm arranges for a critical review of its practices by another CPA firm
Serially numbered pronouncements issued by ASB over a period of years
SASs: Statements on Auditing Standards
Conducts operational audits and reports the results to Congress
GAO: Govt. Accountability Office
Differentiates CPA who audits financial statements from management
Independence
Audits now, compared to those before 1900 are more likely to include
Tests of compliance with laws and regulations
SEC issues
Financial Reporting Releases
Created to toughen penalties for corporate fraud, restricts types of consulting CPA may perform for audit clients, eliminated portions of Self Regulation
SOX
T/F SOX created the PCAOB as a replacement for FASB
False
Boundaries of an ______ audit are often drawn from an org. chart and are not limited to a single accounting period.
Operational
AICPA continuing professional education requirements ..
members, regardless of whether they are in public practice are required to meet these req
FDIC Improvement Act required large financial institutions to have their internal controls over _____ attested.
Financial reporting
SOX established
PCAOB
Primary responsibility for performance of an audit
Partner
____ audit describes the audit of a TP's tax return by an IRS auditor
compliance
Government auditing extends to include ______
compliance
______ auditing is primarily oriented toward future improvements to accomplish the goals of management by providing recommendations.
operational
Integrated Audit Requires Auditors to report on
Financial Statements and Internal Control
Public Companies, Regulated by SEC
PCAOB
Non- Public Companies, Regulated by ASB who provides SASs
AICPA
Develops Standards for public and nonpublic companies
FASB
Develops Acct Standards for the US govt
FASAB
Formed to improve standards of financial accounting for state and local entities
GASB