adequatel practical experience for the work being performed continuing professtional educationformal education in auditing and accountingall of the above
accountants performing important parts of the work failed to diecover a close relationship between the treasurer and the cashier mstatistical smapling techniques were not used in the audit engagementthe auditor planned the work in a hasty and inefficient mannerthe fraud was perpetrated by one client employee, who circumvented the existing internal controls.
Extreme or unusual negligence without the intent to deceive. Lack of slight careKnowledge and intent to deceiveAbsense of reasonable care
document the terms of the engagement to writing in order to minimize misunderstandings document the CPA firm's responsibility to external users of the audited financial statements.notify the audit staff of an upcoming engagement so that personnel scheduling can be familitated.all of the above.
objective review of the adequacy of the technical training and proficiency of firm personnel. thorough review of the existing internal control structure.periodic review of a CPA firm's quality control procedures.critical review of work done at every level of supervision.
regulatory requirements the extent of competition within the indusry.general economic conditionsall of the above
make inquiries of management regarding their policies for detecting and preventing illegal acts and regarding their knowledge of violations, and then rely on normal audit procedures to detect errors, irregularities, and illegalities. ignore the topicinclude audit procedures which have a strong possibility of detecting illegal acts.still include some audit procedures designed specifically to uncover illegalities.
the Rules of Conduct are enforceable the Interpretations are enforceable.the Ethicl Rulings are enforceable.the Principles are enforceable.
general guidelines to aid auditors rules imposed by the SEC.rules imposed by the American Institute of CPAa.rules imposed by the US Congress.
6 months from date of audit report 6 months from the date of the financial statements1 year from date of audit report1 year from date of the financial statements
A. A non-independent relationship between auditor and client. B. a severe limitation on the scope of the audit examination.either A or B abovenone of the above.
Type of audit procedure to use. Timing of audit procedures.# of items to examineAll of the above are relevant.
A. the company's management B. the stockholders of the client company.C. the B o D of the client companyeither B of C
Absence of causal connections. Non-negligent performanceLack of DutyContributory negligence
Lack of Duty Contributory negligenceNon-negligent performanceAbsence of causal connections
Existence deals with understatements and completeness deals with overstatements. The existence and completeness objectives emphasize opposite audit concerns.The completeness objective deals with unrecorded transactions.Existence deals wth overstatements and completeness deals with understatments.
it has the qualities of being relevant, onjective, and free from known bias. it has been obtained by random selection.it consists of written statements made by managers of the enterprise under audit.there is enough of it to afford a reasonable basis for an opintion on financial statements.
discover all errors and/or irregularities. obtain reasonable assurance whether the statements are free of material misstatement.conform to generally accepted accounting principles.discover material errors and/or irregularities.
examination reviewcompilationnone of the above
the responsibility of management. the joint responsibility of management and the auditorthe responsibility of the auditor.none of the above
to distinguish the audit report from a compilation or review report. to communicate the responsibilities of management in preparing the financial statements and to clarify the respective roles of management and the auditor.to identify the financial statements which were audited and the dates and time periods covered by the report.all of the above
the need for public confidence in the quality of service of the profession. that it provides a safeguard to keep unscrupulous people out.that it allows licensing agencies to have a yardstick to measure deficient performance.that it is required by federal legislation.
Interpretations DepositionsPrinciplesRules of Conduct.
is satisfied that the statements are presented faily in accordance with GAAP except for a specific aspect of them. does not beleive the statements are presented fairly in accordance with GAAP.is satisfied that the statements are presented fairly in accordance with GAAP.does not know if the statements are presented fairly in accordance with GAAP.
the financial statements will be found to be misleading or misstated, if an adequate investigation is performed. the audit firm is not independent.some parts of the financial statements are materially misstated or misleading.the overall financial ststements are so materially misstated or misleading as a whole that they do not present faily the financial position or results of operations and cash flows in conformity with GAAP.
client letter representation letterengagement letter.resposinility letter.
indicate possible misstatements (attention directing) assess the going concern assumption.help the auditor obtain an understanding of the client's industry and business.reduce tests of details of balances.
does not believe the statements are presented faily. is satisfied that the statements are presented faily "except for" a specific aspect of themdoes not know if the statements are presented fairly.is satisfied that the statements are presented fairly.
Disclaimer of opinion Negative confirmationnegative assurancepiecemeal opinion.
Accounting presentations contain complex estimates which inherently involve uncertainty. Fraudulently prepared financial statements are often difficult to detect.The auditor commonly examines a sample, rather than the entire population of transactions.Auditors believe that reasonable assurance is sufficient in the vast majority of cases.
A copy of the current and prior years' audit programs Copies of articles of incorporation, bylaws and contracts.Results of analytical procedures from prior years.Information related to the understanding of internal control.
the difficulty of enforcing general ideals, or principles that they identify ideal conductthe emphasis on positive activities.that there are too many to remember
acceptable audit risk control riskstatistical riskinherent risk
members of the management team are fulfilling their fiduciary responsibilities to shareholders entity is following specific procedures or rules set down by some higher authorityorganization is operating efficiently and effectivelynone of the above
unequivocal limited assurancepositivenegative
Implicitly Implicitly Explicitly ExplicitlyImplicitly ExplicitlyExplicitly Implicitly
An inquiry by a disciplinary body of a state CPA society requests confidential client information The CPA is issued a summons enforceable by a court order which orders the CPA to present confidential information.Confidential client information is made available as part of a quality review of the CPA's practice by a peer review team authorized by the AICPAA major stockholder of a client company seeks accounting information from the CPA after management declined to disclose the requested information.
that are no material fraud. there are no material errorsthe possibility of a material error or fraud is lessenedthere are no material errors or fraud.
management for the statements and the auditor for the notes. the auditor.bothe management and the auditor equallymanagement
the auditor and management agree that procedures will not be applied to all acccounts and circumstances the auditor and management agree that procedures will be applied wo all accounts and circumstances.the auditor and management or a third party agree that the audit will be limited to certain specific audit procedures.none of the above.
there is a written contract there is a close causal connection between the auditor's breach of the standard of due care and the damages suffered by the clientthe auditor was fraudulentthe auditor was grossly negligent
determining if fraud has occurred. determining if taxable income has been calculated correctly.analyzing the financial information to be sure that it complies with government requirementsdetermining whether recorded information properly reflects the economic events that occurred during the accounting period.
first and only paragraph second, or scope paragraphfourth or explanatory paragraphthird or opinion paragraph
The 3rd party user does not have the burden of proof that the loss was caused by the misleading statements the third party user does have the burden of proof that the auditor was either negligent or fraudulent in doing the auditThe 3rd party user does not have the burden of proof that he/she relied on the financial statementsAny 3rd party that purchased securities described in the registration statement may sue the auditor for material misrepresentations or omissions in the audited financial statements.
compilation and review services audit and examination servicesmanagement advisory services and compilationsexamination and review services.
provide reasonable assurance that the audit was conducted in accordance with GAAS. provide a basis for reviewing the work of subordinatesdefend against claims of a deficient auditnone of the above
They are interpretations which are intended to clarify the meaning of GAAS. they are authoritative statements, enforced through the Code of Professional Conduct,m and are intended to limit the degree of auditor judgementthey are guides intended to set forth auditing procedures which are applicable to a variety of situations.they are procedural outlines which are intended to narrow the areas of inconsistency and divergence of auditor opinion.
maximum standards which denote excellent work minimum standards of performance which must be achieved on each audit engagementideals to work towards, but which are not achievablebenchmarks to be used on all audits, reviews, and compilations
inherent risk financial riskstatistical riskacceptable audit risk
degree of objectivity effectiveness of internal control structureindependence of providersize of the sample
to avoid misunderstandings with the client to help keep audit costs reasonableto enable the auditor to obtain sufficient competent evidenceto enable proper on the job training of employees
SAS 56 emphasizes expectations developed by the auditor. analytical procedures should be performed in every phase of the auditanalytical procedures use comparison and relationships to assess whether account balances appear to be reasonable.Analytical procedures may be performed at any time during the audit.
Fieldwork standards are primarily directed at the auditor's planning, understanding of internal control, and evidence accumulation. Fieldwork standards provide extensive guidance regarding the conduct of an auditFieldwork standards are primarily concerned with personal attributes necessary during the conduct of the audit.Fieldwork standards are primarily concerned with the conduct of substantive testing as opposed to testing of internal controls.
An audit requires less evidence related to internal control than a review. A review requires less evidence than an audit.A review requires more substantive evidence than an audit.None of the statements is true.
a system of quality control continuing professional education.a system of peer reviewcompliance with generally accepted reporting standards.
stated in the footnotes to the financial statements. provided to the auditor in the assertions letter, but are not disclosed on the financial statements.explicitly expressed representations about the financial statements.implied or expressed representations about classes of transactions and the related accounts in the financial statements.
A. An auditor's scope has been restricted due to circumstances beyond the client's control. B. There are highly material misstatements in the financial statements.C. The substantial doubts related to an entity's ability to continue as a going concern.A disclaimer may be issued for circumstances discussed in A and C.
which is to be sold in the near future which has extensive indebtednesswhose stock is publicly heldall of above
A statement that all information included in the financial statements is the representation of management. A staement describing the auditor's conclusions based upon the results of the review.A statement that the review was in accordance with GAAS.a statement describing the priciple procedures performed.