ACCT 4334: Final Exa cy cy cy
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1.Chapter 1: Auditing and Assurance Services: -
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memorize exact def of auditor's responsibility
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-Know why there is a need for external audits
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-Be familiar with the def of auditing
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-Know assertions cy
-PERCV (heavy on CPA exam) cy cy cy cy
-Maybe one q on professional skepticism
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-Know SOX and why we have it
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-Know services you can't provide for audit client
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2.What is an auditor's reponsibility?: •Design audit procedures that pro
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vide reasonable assurance of detecting material misstatements whethe
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r caused by error, fraud or direct effect illegal acts (non compliance)
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3.What type of information do users demand?: reliable, relevant, and tim
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y info cy
4.What four environmental condition
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s increase user demand?: complexi
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ty:
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children need services provided by info professionals to help make info
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nderstand- able for their decision process cy cy cy cy cy
remoteness:
-children need to employ full- cy cy cy cy
time info professionals to do work they cannot do for themselves
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-based on distance/timecy cy
time sensitivity:
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ability to promptly obtain quality info is essential to businesses that wa
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nt to remain competitive in global environment
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1cy/
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, ACCT 4334: Final Exa
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consequences:
-involves significant investment of resources
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-reliable info is an absolute necessity
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, ACCT 4334: Final Exa cy cy cy
m
5.What is information risk?: the probability that the information circul
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ated by a company will be false or misleading
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6.Why is there demand for auditing and assurance services?: because diff
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erent interest exist between the people preparing the stmts and the u
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sers (children) cy
7.Why is there a need for external audit?: to ensure that financial statem
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ents are correct cy cy
8.What is assurance?: the lending of credibility to information
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9.What is the definition of attestation?: a professional service resulting in
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a report on an assertion (or assertions) about subject matter that is t
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he responsibility of another party
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10.What is the definition of auditing?: a systematic process of objectivel
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y obtain- ing and evaluating evidence regarding
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assertions (financial statements including footnotes) about economic a
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ions and events to ascertain the degree of correspondence between th
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e assertions and
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established criteria (GAAP) and cy cy cy
communicating the results (auditor's report/other report) to cy cy cy cy cy cy
interested users (persons who rely on the financial reports, e.g., credito
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s/investors, i.e., the children). cy cy cy
11.What is the level of assurance an audit should have?: Reasonable a
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ssur- ance (not everything can be detected)
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12.What does management make assertions about?: •Management mak
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es as- cy
sertions about economic events that occurred during the period.
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• Management makes assertions about account balances at the end o cy cy cy cy cy cy cy cy cy
ythe period. cy
• Management makes assertions about financial statement presentati cy cy cy cy cy cy
on and disclo- sures.
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13.What are the five assertions?: Presentation and disclosure
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existence (asset) or occurrence (transaction cy cy cy cy
3cy/
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, ACCT 4334: Final Exa
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s) Rights and obligations - owning/
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owing Completeness/Cutoff
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m
1.Chapter 1: Auditing and Assurance Services: -
cy cy cy cy cy cy
memorize exact def of auditor's responsibility
cy cy cy cy cy
-Know why there is a need for external audits
cy cy cy cy cy cy cy cy
-Be familiar with the def of auditing
cy cy cy cy cy cy
-Know assertions cy
-PERCV (heavy on CPA exam) cy cy cy cy
-Maybe one q on professional skepticism
cy cy cy cy cy
-Know SOX and why we have it
cy cy cy cy cy cy
-Know services you can't provide for audit client
cy cy cy cy cy cy cy
2.What is an auditor's reponsibility?: •Design audit procedures that pro
cy cy cy cy cy cy cy cy cy
vide reasonable assurance of detecting material misstatements whethe
cy cy cy cy cy cy cy
r caused by error, fraud or direct effect illegal acts (non compliance)
cy cy cy cy cy cy cy cy cy cy cy
3.What type of information do users demand?: reliable, relevant, and tim
cy cy cy cy cy cy cy cy cy cy
y info cy
4.What four environmental condition
cy cy cy
s increase user demand?: complexi
cy cy cy cy
ty:
-
children need services provided by info professionals to help make info
cy cy cy cy cy cy cy cy cy cy cy
nderstand- able for their decision process cy cy cy cy cy
remoteness:
-children need to employ full- cy cy cy cy
time info professionals to do work they cannot do for themselves
cy cy cy cy cy cy cy cy cy cy
-based on distance/timecy cy
time sensitivity:
cy
-
ability to promptly obtain quality info is essential to businesses that wa
cy cy cy cy cy cy cy cy cy cy cy
nt to remain competitive in global environment
cy cy cy cy cy cy
1cy/
cy51
, ACCT 4334: Final Exa
cy cy cy
m
consequences:
-involves significant investment of resources
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-reliable info is an absolute necessity
cy cy cy cy cy
2cy/
cy51
, ACCT 4334: Final Exa cy cy cy
m
5.What is information risk?: the probability that the information circul
cy cy cy cy cy cy cy cy cy
ated by a company will be false or misleading
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6.Why is there demand for auditing and assurance services?: because diff
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erent interest exist between the people preparing the stmts and the u
cy cy cy cy cy cy cy cy cy cy cy
sers (children) cy
7.Why is there a need for external audit?: to ensure that financial statem
cy cy cy cy cy cy cy cy cy cy cy cy
ents are correct cy cy
8.What is assurance?: the lending of credibility to information
cy cy cy cy cy cy cy cy
9.What is the definition of attestation?: a professional service resulting in
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a report on an assertion (or assertions) about subject matter that is t
y cy cy cy cy cy cy cy cy cy cy cy cy
he responsibility of another party
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10.What is the definition of auditing?: a systematic process of objectivel
cy cy cy cy cy cy cy cy cy cy
y obtain- ing and evaluating evidence regarding
cy cy cy cy cy cy
assertions (financial statements including footnotes) about economic a
cy cy cy cy cy cy cy
ions and events to ascertain the degree of correspondence between th
cy cy cy cy cy cy cy cy cy cy
e assertions and
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established criteria (GAAP) and cy cy cy
communicating the results (auditor's report/other report) to cy cy cy cy cy cy
interested users (persons who rely on the financial reports, e.g., credito
cy cy cy cy cy cy cy cy cy cy
s/investors, i.e., the children). cy cy cy
11.What is the level of assurance an audit should have?: Reasonable a
cy cy cy cy cy cy cy cy cy cy cy
ssur- ance (not everything can be detected)
cy cy cy cy cy cy
12.What does management make assertions about?: •Management mak
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es as- cy
sertions about economic events that occurred during the period.
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• Management makes assertions about account balances at the end o cy cy cy cy cy cy cy cy cy
ythe period. cy
• Management makes assertions about financial statement presentati cy cy cy cy cy cy
on and disclo- sures.
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13.What are the five assertions?: Presentation and disclosure
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existence (asset) or occurrence (transaction cy cy cy cy
3cy/
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, ACCT 4334: Final Exa
cy cy cy
m
s) Rights and obligations - owning/
cy cy cy cy cy
owing Completeness/Cutoff
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4cy/
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