Comprehensive
Audit and
Assurance
Services: Key
Concepts and
Standards |
Accounting Study
Guide
,Terms in this set (231)
How is auditing different from accounting? Accounting is the recording of economic events. Auditing is determining
whether those economic events actually happened.
Define assurance services. Individual professional services that improve or enhance the quality of
information for decision making.
Define attestation services. A type of assurance service in which the CPA firm issues a report about a
subject matter or assertion that is the responsibility of another party.
Define a Review. An engagement to obtain limited assurance that no material
modifications are needed to the financial statements. Completed through
analytical procedures and inquiries.
Define a Compilation. Assisting management in presenting financial information in the form of
financial statements, going through them, and pointing out any obvious
omissions.
,Define Non-assurance Services and give examples. Services that do not require an auditor and provide no assurance.
Examples: tax services, bookkeeping, and payroll.
What are the 3 types of audits? Financial, Compliance, and Operational.
What is an operational audit? An audit that evaluates the efficiency and effectiveness of an
organization's operating procedures and whether management is
meeting organizational goals.
What are the 3 requirements to become a CPA? Credit hours, passing the CPA exam, and service (experience) hours.
What is the role of the PCAOB? Overseen by the SEC, the PCAOB issues auditing standards and rules for
CPA firms that audit public companies.
Describe the Sarbanes-Oxley Act of 2002 and its Enacted to restore investor confidence after the Enron crisis. It created
key sections. the PCAOB, required CEO/CFO certification of financial statements,
mandated auditor rotation, restricted non-audit services, and required
audit committees to pre-approve certain services.
, What is the role of the AICPA and its 4 major areas? Sets professional requirements for CPAs. The four major areas are:
auditing standards, preparation standards, other attestation standards,
and the code of professional conduct.
What is peer review? People in the same profession review your work and practices to assess
quality and compliance with professional standards.
What auditing standards are used when auditing a PCAOB standards.
publicly traded company?
What auditing standards are followed for audits of a GAAS — Generally Accepted Auditing Standards, specifically the AICPA's
private company? Statements on Auditing Standards.
What accounting standards setter issues guidelines The ARSC (Accounting and Review Services Committee) issues SSARS —
for reviews and compilations? Statements on Standards for Accounting and Review Services.
What are agreed-upon procedures? An engagement where a CPA agrees to perform a specific set of steps
defined by the client and issues a factual report of findings to specified
users only.
Audit and
Assurance
Services: Key
Concepts and
Standards |
Accounting Study
Guide
,Terms in this set (231)
How is auditing different from accounting? Accounting is the recording of economic events. Auditing is determining
whether those economic events actually happened.
Define assurance services. Individual professional services that improve or enhance the quality of
information for decision making.
Define attestation services. A type of assurance service in which the CPA firm issues a report about a
subject matter or assertion that is the responsibility of another party.
Define a Review. An engagement to obtain limited assurance that no material
modifications are needed to the financial statements. Completed through
analytical procedures and inquiries.
Define a Compilation. Assisting management in presenting financial information in the form of
financial statements, going through them, and pointing out any obvious
omissions.
,Define Non-assurance Services and give examples. Services that do not require an auditor and provide no assurance.
Examples: tax services, bookkeeping, and payroll.
What are the 3 types of audits? Financial, Compliance, and Operational.
What is an operational audit? An audit that evaluates the efficiency and effectiveness of an
organization's operating procedures and whether management is
meeting organizational goals.
What are the 3 requirements to become a CPA? Credit hours, passing the CPA exam, and service (experience) hours.
What is the role of the PCAOB? Overseen by the SEC, the PCAOB issues auditing standards and rules for
CPA firms that audit public companies.
Describe the Sarbanes-Oxley Act of 2002 and its Enacted to restore investor confidence after the Enron crisis. It created
key sections. the PCAOB, required CEO/CFO certification of financial statements,
mandated auditor rotation, restricted non-audit services, and required
audit committees to pre-approve certain services.
, What is the role of the AICPA and its 4 major areas? Sets professional requirements for CPAs. The four major areas are:
auditing standards, preparation standards, other attestation standards,
and the code of professional conduct.
What is peer review? People in the same profession review your work and practices to assess
quality and compliance with professional standards.
What auditing standards are used when auditing a PCAOB standards.
publicly traded company?
What auditing standards are followed for audits of a GAAS — Generally Accepted Auditing Standards, specifically the AICPA's
private company? Statements on Auditing Standards.
What accounting standards setter issues guidelines The ARSC (Accounting and Review Services Committee) issues SSARS —
for reviews and compilations? Statements on Standards for Accounting and Review Services.
What are agreed-upon procedures? An engagement where a CPA agrees to perform a specific set of steps
defined by the client and issues a factual report of findings to specified
users only.
