AUD
What type of assurance do auditors provide with agreed upon procedures?
Agreed-upon procedures (AUP) do not provide assurance or an opinion on the financial
information or processes being reviewed. Instead, the report from an AUP engagement consists
of factual findings based on the specific procedures that were agreed upon.
Is independence impaired if a covered member or immediate family member has a loan to the
client?
Yes
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Is independence impaired if a covered member has a fully collateralized car loan from the
client?
No
What is the limit for cash advances and credit card balances before they impair independence?
$10,000
Does having an FDIC insured bank account with the client impair independence?
No
Give examples of direct financial interests
Stock ownership
,Involvement in partnerships as a general partner
Financial interest in a trust when the member is a trustee/grantor
Give examples of indirect financial interests
Shares in a mutual fund invested heavily in a client
Direct interest in a company with direct interest in a client
Under the AICPA Code of Professional Conduct, how should an auditor respond to a client
requesting that records be returned?
The accountant must return the records
What is an independent custodian?
A stock independent custodian is a financial institution that holds and protects a client's assets,
such as stocks, bonds, and mutual funds.
In establishing existence and ownership of investments, auditor can send confirmations to
independent custodians.
Assertions and relevant procedures for investment cycle
Valuation - use verified listing prices
Completeness - analytical review to determine reasonableness of income given amount
invested
Existence - inspection of securities, confirmation with custodian, review of brokerage statements
Classification - evaluation based on accounting principles
What does the opinion paragraph of a report refer to: GAAP or GAAS?
GAAP
What does the basis for opinion of a report refer to: GAAP or GAAS?
GAAS
What are explanatory paragraphs, who uses them, and in what circumstances are they
required?
Auditors of public companies to provide further context on the financial statements
Required when:
Change in estimate inseparable from principle
, Corrects error in principle
Correction of previously issued misstatement
What are emphasis of matter paragraphs, who uses them, and in what circumstances are they
required?
Auditors of private companies to emphasize matters explicitly stated in the financial statements
Required when:
Consistency/lack of, or justified change in principle
Audit opinion change
Special purpose frameworks
Typically don't emphasize lawsuits unless "unusually important"
What are other matter paragraphs, who uses them, and when are they required?
Auditors of private companies to discuss matters not explicitly stated in the financial statements
Required when:
Restricting use of financials
Subsequently discovered facts
Comparative financial statements
Which procedures are subject to SSARS?
Preparation, compilation, and review (on historical financials)
Which procedures are subject to SSAE?
Review (not on historical financial statements), examination, agreed-upon procedures
Required sections of an unqualified report
Opinion, basis for opinion (including management and auditor responsibilities), CAMs
Required sections of an unmodified report
Opinion, basis for opinion, management responsibility, auditor responsibility
KAMs are optional in audits of private companies
How are non-issuer reports modified for qualified or adverse opinions?
Qualified:
What type of assurance do auditors provide with agreed upon procedures?
Agreed-upon procedures (AUP) do not provide assurance or an opinion on the financial
information or processes being reviewed. Instead, the report from an AUP engagement consists
of factual findings based on the specific procedures that were agreed upon.
Is independence impaired if a covered member or immediate family member has a loan to the
client?
Yes
Previous
Pause
Next
Rewind 10 seconds
Move forward 10 seconds
Unmute
0:00
/
0:15
Full screen
Brainpower
Read More
Is independence impaired if a covered member has a fully collateralized car loan from the
client?
No
What is the limit for cash advances and credit card balances before they impair independence?
$10,000
Does having an FDIC insured bank account with the client impair independence?
No
Give examples of direct financial interests
Stock ownership
,Involvement in partnerships as a general partner
Financial interest in a trust when the member is a trustee/grantor
Give examples of indirect financial interests
Shares in a mutual fund invested heavily in a client
Direct interest in a company with direct interest in a client
Under the AICPA Code of Professional Conduct, how should an auditor respond to a client
requesting that records be returned?
The accountant must return the records
What is an independent custodian?
A stock independent custodian is a financial institution that holds and protects a client's assets,
such as stocks, bonds, and mutual funds.
In establishing existence and ownership of investments, auditor can send confirmations to
independent custodians.
Assertions and relevant procedures for investment cycle
Valuation - use verified listing prices
Completeness - analytical review to determine reasonableness of income given amount
invested
Existence - inspection of securities, confirmation with custodian, review of brokerage statements
Classification - evaluation based on accounting principles
What does the opinion paragraph of a report refer to: GAAP or GAAS?
GAAP
What does the basis for opinion of a report refer to: GAAP or GAAS?
GAAS
What are explanatory paragraphs, who uses them, and in what circumstances are they
required?
Auditors of public companies to provide further context on the financial statements
Required when:
Change in estimate inseparable from principle
, Corrects error in principle
Correction of previously issued misstatement
What are emphasis of matter paragraphs, who uses them, and in what circumstances are they
required?
Auditors of private companies to emphasize matters explicitly stated in the financial statements
Required when:
Consistency/lack of, or justified change in principle
Audit opinion change
Special purpose frameworks
Typically don't emphasize lawsuits unless "unusually important"
What are other matter paragraphs, who uses them, and when are they required?
Auditors of private companies to discuss matters not explicitly stated in the financial statements
Required when:
Restricting use of financials
Subsequently discovered facts
Comparative financial statements
Which procedures are subject to SSARS?
Preparation, compilation, and review (on historical financials)
Which procedures are subject to SSAE?
Review (not on historical financial statements), examination, agreed-upon procedures
Required sections of an unqualified report
Opinion, basis for opinion (including management and auditor responsibilities), CAMs
Required sections of an unmodified report
Opinion, basis for opinion, management responsibility, auditor responsibility
KAMs are optional in audits of private companies
How are non-issuer reports modified for qualified or adverse opinions?
Qualified:
