ACCT 3222-3, Wiley, LSU, Exam 1
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1. Audit Services services by an independent CPA that provide financial statement users with (1) an
opinion on whether the financial statements are presented fairly, in all material
respects, in accordance with an applicable financial reporting framework and (2)
an opinion on the effectiveness of ICFR, which enhance the degree of confidence
that intended users can place in the financial statements
2. Attestation Ser- Services performed when an independent practitioner, or CPA, is engaged to issue
vices a report on subject matter that is the responsibility of another party
3. Relationship of Audit - highest quality/reasonable assurance (i.e., historical financial statements)
assurance, attes- Attestation - mid quality/limited assurance (i.e., review of historical financial state-
tation, and audit- ments, examination of internal controls, review of financial forecast)
ing services from Assurance - lowest quality (i.e., compilation of historical financial statements,
most to least im- website security, IT operations, non-financial information)
proved of quality
(i.e., assurance)
4. Assurance Ser- independent professional services that improve the quality of information, or its
vices context, for decision makers
5. Applicable finan- the set of standards used in preparing the historical financial statements (i.e.,
cial reporting GAAP, IFRS, or federal income tax basis of accounting)
framework refers
to
6. Independent im- someone who was not involved with the creation of the information and who is
plies that the ser- objective in the evaluation of the information
vice is performed
by
7. Quality refers to the relevance and realiability of the information
8.
, ACCT 3222-3, Wiley, LSU, Exam 1
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Information subject matter that can be financial or nonfinancial, historical or prospective,
refers to standalone data or entire systems of data, internal or external to a company
9. CPAs are the Licensed accounting professionals in the US.
only _________ ac- Licenses are issued at the state level, not federal
counting profes-
sionals in the US
and the ________
are issued at the
____________ level
10. A state board of a licence to practice after all three Es have been earned
accountancy will
only issue
11. CPA Es Education, Exam, and Experience
12. Public compa- an annual financial statement audit and an ICFR audit
nies, or issuers,
in the US are re-
quired by feder-
al government to
have
13. Private compa- Not required by law, other interested users may request audited financial state-
nies, or non-is- ments (i.e., lenders)
suers, are _______
to have an annu-
al audit by fed-
eral government,
but
14. ICFR Internal Control over Financial Reporting
, ACCT 3222-3, Wiley, LSU, Exam 1
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15. Integrated Audit An audit that combines the financial statement audit with an audit of the effec-
tiveness of ICFR
16. The limitations 1. the nature of financial reporting
of an audit are 2. the nature of audit procedures
cause by 3. the need for the audit to be conducted within a reasonable period of time at a
reasonable cost
17. The nature of fi- the use of judgment when preparing financial statements due to the subjectivity
nancial reporting required when arriving at accounting estimates and judgment required when
refers to selecting and applying accounting methods
18. The nature of Reliance on evidence provided by the client and its managements, as well as the
audit procedures concept of materiality
refers to
19. Materiality the ability of information to influence decisions that users make on the basis of
the financial information of a specific reporting entity
20. Compliance Au- an audit to determine whether the entity has conformed with regulations, rules,
dit or processes
21. Operational (Per- An assessment of the economy, efficiency, and effectiveness of an organization's
formance) Audit operations
22. Operational Au- Economy refers to the cost of inputs
dit economy, effi- Efficiency refers to the relationship between inputs and outputs
ciency, and effec- Effectiveness refers to the achievement of certain goals or the production of a
tiveness refer to certain level of outputs
23. Internal Audit A function within an entity which generally evaluates and improves risk manage-
ment, internal control procedures, and elements of the governance process
24.
, ACCT 3222-3, Wiley, LSU, Exam 1
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Those charged Persons with responsibility for overseeing the strategic direction of the entity and
with governance the obligations related to the accountability of the entity
25. The external au- Internal auditors when evaluating the evidence needed to form an opinion on the
ditor may rely on financial statements or on ICFR
the work done by
26. Financial State- Investors, suppliers, customers, lenders, employees, governments, and the gen-
ment Users in- eral public
clude
27. Sources of de- Remoteness (users do not have access to the company)
mand for au- Complexity (amounts affected by significant estimates requiring knowledge and
dit and assur- experience to evaluate)
ance services Competing incentives (determine biased information)
Reliability
28. Management is 1. Ensuring the information included in the financial statements is presented fairly
responsible for and complies with the applicable financial reporting frameowrk
2. Designing, implementing, and maintaining internal control relevant to the
preparation and fair presentation of the financial statements
3. Providing the auditor with access to all records, documentation, and personnel
relevant to the preparation and fair presentation of the financial statements, and
any additional information the auditors may consider relevant to complete the
audit
Also, mgmt is responsible for making estimates for some f/s items and selecting
appropriate accounting policies within the applicable financial reporting frame-
work
29. Auditors are re- 1. Conducting the audit in accordance with the appropriate auditing standards
sponsible for 2. Planning and performing the audit with professional skepticism
3. Planning and performing the audit with professional judgment
Study online at https://quizlet.com/_57szkm
1. Audit Services services by an independent CPA that provide financial statement users with (1) an
opinion on whether the financial statements are presented fairly, in all material
respects, in accordance with an applicable financial reporting framework and (2)
an opinion on the effectiveness of ICFR, which enhance the degree of confidence
that intended users can place in the financial statements
2. Attestation Ser- Services performed when an independent practitioner, or CPA, is engaged to issue
vices a report on subject matter that is the responsibility of another party
3. Relationship of Audit - highest quality/reasonable assurance (i.e., historical financial statements)
assurance, attes- Attestation - mid quality/limited assurance (i.e., review of historical financial state-
tation, and audit- ments, examination of internal controls, review of financial forecast)
ing services from Assurance - lowest quality (i.e., compilation of historical financial statements,
most to least im- website security, IT operations, non-financial information)
proved of quality
(i.e., assurance)
4. Assurance Ser- independent professional services that improve the quality of information, or its
vices context, for decision makers
5. Applicable finan- the set of standards used in preparing the historical financial statements (i.e.,
cial reporting GAAP, IFRS, or federal income tax basis of accounting)
framework refers
to
6. Independent im- someone who was not involved with the creation of the information and who is
plies that the ser- objective in the evaluation of the information
vice is performed
by
7. Quality refers to the relevance and realiability of the information
8.
, ACCT 3222-3, Wiley, LSU, Exam 1
Study online at https://quizlet.com/_57szkm
Information subject matter that can be financial or nonfinancial, historical or prospective,
refers to standalone data or entire systems of data, internal or external to a company
9. CPAs are the Licensed accounting professionals in the US.
only _________ ac- Licenses are issued at the state level, not federal
counting profes-
sionals in the US
and the ________
are issued at the
____________ level
10. A state board of a licence to practice after all three Es have been earned
accountancy will
only issue
11. CPA Es Education, Exam, and Experience
12. Public compa- an annual financial statement audit and an ICFR audit
nies, or issuers,
in the US are re-
quired by feder-
al government to
have
13. Private compa- Not required by law, other interested users may request audited financial state-
nies, or non-is- ments (i.e., lenders)
suers, are _______
to have an annu-
al audit by fed-
eral government,
but
14. ICFR Internal Control over Financial Reporting
, ACCT 3222-3, Wiley, LSU, Exam 1
Study online at https://quizlet.com/_57szkm
15. Integrated Audit An audit that combines the financial statement audit with an audit of the effec-
tiveness of ICFR
16. The limitations 1. the nature of financial reporting
of an audit are 2. the nature of audit procedures
cause by 3. the need for the audit to be conducted within a reasonable period of time at a
reasonable cost
17. The nature of fi- the use of judgment when preparing financial statements due to the subjectivity
nancial reporting required when arriving at accounting estimates and judgment required when
refers to selecting and applying accounting methods
18. The nature of Reliance on evidence provided by the client and its managements, as well as the
audit procedures concept of materiality
refers to
19. Materiality the ability of information to influence decisions that users make on the basis of
the financial information of a specific reporting entity
20. Compliance Au- an audit to determine whether the entity has conformed with regulations, rules,
dit or processes
21. Operational (Per- An assessment of the economy, efficiency, and effectiveness of an organization's
formance) Audit operations
22. Operational Au- Economy refers to the cost of inputs
dit economy, effi- Efficiency refers to the relationship between inputs and outputs
ciency, and effec- Effectiveness refers to the achievement of certain goals or the production of a
tiveness refer to certain level of outputs
23. Internal Audit A function within an entity which generally evaluates and improves risk manage-
ment, internal control procedures, and elements of the governance process
24.
, ACCT 3222-3, Wiley, LSU, Exam 1
Study online at https://quizlet.com/_57szkm
Those charged Persons with responsibility for overseeing the strategic direction of the entity and
with governance the obligations related to the accountability of the entity
25. The external au- Internal auditors when evaluating the evidence needed to form an opinion on the
ditor may rely on financial statements or on ICFR
the work done by
26. Financial State- Investors, suppliers, customers, lenders, employees, governments, and the gen-
ment Users in- eral public
clude
27. Sources of de- Remoteness (users do not have access to the company)
mand for au- Complexity (amounts affected by significant estimates requiring knowledge and
dit and assur- experience to evaluate)
ance services Competing incentives (determine biased information)
Reliability
28. Management is 1. Ensuring the information included in the financial statements is presented fairly
responsible for and complies with the applicable financial reporting frameowrk
2. Designing, implementing, and maintaining internal control relevant to the
preparation and fair presentation of the financial statements
3. Providing the auditor with access to all records, documentation, and personnel
relevant to the preparation and fair presentation of the financial statements, and
any additional information the auditors may consider relevant to complete the
audit
Also, mgmt is responsible for making estimates for some f/s items and selecting
appropriate accounting policies within the applicable financial reporting frame-
work
29. Auditors are re- 1. Conducting the audit in accordance with the appropriate auditing standards
sponsible for 2. Planning and performing the audit with professional skepticism
3. Planning and performing the audit with professional judgment
