BMGT 422 EXAM 1 QUESTIONS WITH
ALL ANSWERS CORRECT
Generally Accepted Auditing Standards
forms an opinion on whether Financial statements are fairly stated materially by
an applicable financial reporting framework by identifying and assessing the
risks of material misstatement based on an understanding of the entity and its
environment, including its internal controls.
What is included in the new AICPA ASB-C Standard Unqualified Audit Report
Opinion, basis for opinion, responsibilities of management for the Financial
Statements, Auditor's responsibilities for the Audit of the Financial Statements.
It includes the report title, the addressee, what is being audited and the end of
fieldwork date.
Unqualified or "clean" audit report
Standard report where all basic financial statements are a fair representation and
are in accordance with GAAP in all material respects and GAAS was applied.
Can be slight modifications to the standard report where it would be "clean" but
not standard, for example emphasis on a matter and going concern.
Qualified or "Except for"
Fair representation except for material but not pervasive departures from GAAP
and material but not pervasive scope limitations
Adverse
material and pervasive departures from GAAp or not a fair representation of
financial position
Disclaimer
, Unable to form an opinion because the auditor is not independent, a material
and pervasive scope limitation, and a significant uncertainty
Transaction flows from events to Financial Statements
Transaction/Event -> Journal -> General ledger/subsidiary ledger -> trial
balance -> financial statements
Occurence (transactions)- assertion
transactions and events that have been recorded have occurred and pertain to the
entity
Completeness (transactions)- assertion
all transactions and events that should have been recorded have been recorded
accuracy (transactions)- assertion
amounts and other date relating to recorded transactions and events have been
recorded appropriately
Classification (transactions)- assertion
transactions and events have been recorded in the proper accounts
Cutoff (Transactions)- assertion
Transactions and events have been recorded in the correct accounting period
Existence (balances)- assertion
assets, liabilities, and equity interests exist
Completeness (balances)- assertion
all assets, liabilities, and equity interests that should have been recorded have
been recorded
Valuation and allocation (balances)- assertion
assets, liabilities, and equity interests are included in the financial statements at
appropriate amounts and any resulting valuation adjustments are appropriately
recorded
Rights and obligations (balances)- assertion
ALL ANSWERS CORRECT
Generally Accepted Auditing Standards
forms an opinion on whether Financial statements are fairly stated materially by
an applicable financial reporting framework by identifying and assessing the
risks of material misstatement based on an understanding of the entity and its
environment, including its internal controls.
What is included in the new AICPA ASB-C Standard Unqualified Audit Report
Opinion, basis for opinion, responsibilities of management for the Financial
Statements, Auditor's responsibilities for the Audit of the Financial Statements.
It includes the report title, the addressee, what is being audited and the end of
fieldwork date.
Unqualified or "clean" audit report
Standard report where all basic financial statements are a fair representation and
are in accordance with GAAP in all material respects and GAAS was applied.
Can be slight modifications to the standard report where it would be "clean" but
not standard, for example emphasis on a matter and going concern.
Qualified or "Except for"
Fair representation except for material but not pervasive departures from GAAP
and material but not pervasive scope limitations
Adverse
material and pervasive departures from GAAp or not a fair representation of
financial position
Disclaimer
, Unable to form an opinion because the auditor is not independent, a material
and pervasive scope limitation, and a significant uncertainty
Transaction flows from events to Financial Statements
Transaction/Event -> Journal -> General ledger/subsidiary ledger -> trial
balance -> financial statements
Occurence (transactions)- assertion
transactions and events that have been recorded have occurred and pertain to the
entity
Completeness (transactions)- assertion
all transactions and events that should have been recorded have been recorded
accuracy (transactions)- assertion
amounts and other date relating to recorded transactions and events have been
recorded appropriately
Classification (transactions)- assertion
transactions and events have been recorded in the proper accounts
Cutoff (Transactions)- assertion
Transactions and events have been recorded in the correct accounting period
Existence (balances)- assertion
assets, liabilities, and equity interests exist
Completeness (balances)- assertion
all assets, liabilities, and equity interests that should have been recorded have
been recorded
Valuation and allocation (balances)- assertion
assets, liabilities, and equity interests are included in the financial statements at
appropriate amounts and any resulting valuation adjustments are appropriately
recorded
Rights and obligations (balances)- assertion
