SAS
Statement on Auditing Standards issued by the ASB
SSARS
Statement on Standards for Accounting and Review Services
SSCS
Statement on Standards for Consulting Services
PCAOB
Public Company Acctg Oversight Board. Created as a result of the SOX act of 2002. AS no. 1 and 3-15.
Which of the following statements is true concerning an auditor's responsibilities regarding financial statements?
1.The fair presentation of audited financial statements in conformity with GAAP is an implicit part of the auditor's responsibilities.
2.An
2.An auditor may draft an entity's financial statements based on information from management's accounting system.
This answer is correct.
The independent auditor may make suggestions about the form or content of the financial statements or draft them, in
SQCS's
Statements on Quality Control Standards
SSAE
Statement on Standards for Attestation Engagements
attest engagement
Practitioner is engaged to issue an (1) examination/audit, (2) review, or (3) agreed-upon procedures report on a subject matter that is the responsibility of another party.
Attestation and GAAS Standards (by catagory)
General Standards, Standards of Field Work, Standards of Reporting
Attestation (11)
1. TRAINING and proficiency in attestation
2. knowledge of the SUBJECT matter
3. suitable and available CRITERIA
4. INDEPENDENCE in mental attitude
5. due PROFESSIONAL care
1. PLANNING and supervision
2. sufficient EVIDENCE
1. CHARACTER of engagement
2. C
Attestation Mnemonic
Trisha Said Chris Is Profane... Please Excuse... Cousin Chris's Rude Remarks
T S C I P... P E... C C R R
GAAS (Audit)
1. TRAINING and proficiencey in auditing
2. INDEPENDENCE in mental attitude
3. due PROFESSIONAL care
1. PLANNING and supervision
2. sufficient understanding of INTERNAL control
3. sufficient appropriate audit EVIDENCE
1. conformity with GAAP
2. principles
GAAS (Audit) Mnemonic
Tammy Is Pretty... Peter Is Evil... Great Couple Doing Okay
T I P... P I E... G C D O
Services performed by CPA's
Compilation - disclaimer of any assurance
Review - limited assurance
Examination/audit - positive assurance or opinion express
Agreed-upon procedures - results but no assurance
This type of service requires a disclaimer of assurance.
Compilation engagements.
Two levels of attest assurance are permitted in general-distribution reports:
1. Positive assurance should be given in reports that express conclusions on the basis of an examination.
2. Limited (sometimes termed negative assurance) should be given in reports that express conclusions on the basis of a review.
The practitioner ordinarily should obtain a ___ ___ provided by the responsible party.
written assertion & representation letter
Failure to provide these written representations is normally considered to be a ___ ___.
scope limitation
Assurance services differ from consulting services in two ways:
They focus on improving information rather than providing advice.
Management Assertions mnemonic:
CAVE CROC
Managements Assertions:
Completeness
Accuracy
Valuation and Allocation
Existence
Cutoff
Rights and Obligations
Occurrence
Classification and Understandably
The party responsible for assumptions identified in the preparation of prospective financial statements is usually:
The clients management
Financial forecast
consists of PFSs that present, to the vest of the responsible party's knowledge and belief, an entity's expected financial position
Financial projection
is based on the responsible party's assumptions reflecting conditions it expects would exist and the course of action it expects would be taken, given one or more "hypothetical" assumptions.
Pro Forma Financial Information (PFFI)
PFFI shows what the significant effects on "historical" financial information would have been had a consummated or proposed transaction occurred at an earlier date.
Result of Attestation:
Written conclusion about subject matter. Opinion
Result of Assurance:
Better information for decision makers.
Result of Consulting:
Recommendations based on the objectives of the engagement.
SysTrust is an assurance service developed under the AICPA's ___ standards.
SSAE
One of a CPA firm's basic objectives is to provide professional services that conform with professional standards. Reasonable assurance of achieving this basic objective is provided through
A system of quality control.
Generally accepted auditing standards are
Generally accepted as a consequence of approval by the AICPA membership.
Six elements of a system of quality control:
1. Leadership responsibilities for quality within the firm (the tone at the top"
2. Relevant ethical requirements
3. Acceptance and continuance of client relationships; integrity of clients management.
4. Human resources
5. Engagement performance
6. Monit
The securities of Donley Corporation are listed on a regional stock exchange and registered with the SEC. The management of Donley engages a CPA to perform an independent audit of Donley's financial statements. The primary objective of this audit is to pr
Investors in Donley securities.
Who establishes generally accepted auditing standards?
Auditing Standards Board and the Public Company Accounting Oversight Board.
One of a CPA firm's basic objectives is to provide professional services that conform with professional standards. Reasonable assurance of achieving this basic objective is provided through
A system of quality control.
A CPA is engaged to examine management's assertion that the entity's schedule of investment returns is presented in accordance with specific criteria. In performing this engagement, the CPA should comply with the provisions of:
Statements on Standards for Attestation Engagements (SSAE).
A CPA firm evaluates its personnel advancement experience to ascertain whether individuals meeting stated criteria are assigned increased degrees of responsibility. This is evidence of the firm's adherence to which of the following prescribed standards
Quality control.