Term
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Definition
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Term
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Definition
express opinion on F/S
(If public, also express opinion on management's assertion on IC) |
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Term
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Definition
- T- Training
- I- Independent
- P- Due Professional Care
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Term
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Definition
P- Planning and Supervision
I- internal control, entity and environment
E- Evidence |
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Term
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Definition
- A- Accounting (according to GAAP (explicit))
- C- Consistency (implicit)
- D- Disclosures (Implicit)
- O- Opinion (Explicit)
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Term
| Standard Unqualified Report- Introduction Paragraph |
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Definition
- 3 sentences - R/R
- Responsibility of management (F/S)
- Responsibility of auditor (opinion)
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Term
| Standard Unqualified Opinion - Scope Paragraph |
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Definition
5 Sentences - APMEAM/APMEAM
- Audit conducted in Accordance with US GAAS
- Planned and Performed to provide reasonable assurance that F/S are free from
- Material Misstatements.
- Audit included Examining Evidence on a test basis,
- Assessing the Accounting Principles and estimates
- Made by Management
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Term
| Standard Unqualified Opinion - Opinion Paragraph |
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Definition
| 1 sentence - Express opinion if F/S are free from MM accordance with GAAP |
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Term
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Definition
- applies to audit of issuers (public companies)
- requires reference to abiding by PCAOB guidelines
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Term
| Audit of nonissuers (Private) |
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Definition
| auditor may, but is not required to, adhere to GAAS and standards of the PCAOB (increases reliance) |
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Term
| GAAP departures found in audit |
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Definition
| qualified or adverse opinion depending on the materiality of the departure |
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Term
| 3 examples of GAAP problems leading to qualified or adverse |
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Definition
- Inadequate disclosure
- use of inappropriate accounting principles
- use of unreasonable accounting estimates
- Non-GAAP change
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Term
| 1 reason for modified wording in an unqualified, modified report |
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Definition
division of responsibility with other auditors
make reference in all 3 paragraphs but dont add a paragraph |
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Term
| 7 Reasons for explanatory paragraph with modified, unqualified opinion |
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Definition
- justified departure from GAAP (before or after)
- Going concern issues (after)
- emphasis of matter (before or after)
- justified lack of consitency (after)
- SEC quarterly data omitted
- RSI omitted
- Other info is inconsistent with F/S
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Term
| to accept responsibility for other CPAs work |
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Definition
- must assure on other CPAs competence, reputation, independence, objectivity
- should review audit documenation
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Term
| justified departure from GAAP |
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Definition
| explanatory paragraph includes description, effects, and why needed to avoid misleading F/S |
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Term
2 characteristics of Qualified opinion because of GAAP issues
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Definition
- explanatory paragraph before opinion paragraph with "except for" language used
- change opinion paragraph
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Term
| 2 GAAS problems resulting in qualified reports |
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Definition
- uncertainty (scope- "except", Opinion - "Except for")
- scope limitation (both - "except for"
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Term
| 2 ADDITIONAL reasons for Disclaimer of opinion due to GAAS issues |
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Definition
- lack of independence
- unaudited F/S (only opinion paragraph)
- (Also other 2 reasons previously stated)
- omit scope paragraph and add an explanatory one
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Term
| Scope limitation when reporting on comparative F/S |
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Definition
- When prior year F/S were not audited and current year's were
- may require disclaimer of opinion
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Term
| mnemonic for changing or updating prior opinion |
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Definition
add an Explanatory paragraph that must include
D- date of orginal report
O- opinion previously issues
R- reason for prior opinion
C- Changes that have occurred
S- statement that opinion is now different
(Only dorcs change their opinion) |
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Term
| 4 resonsibilities if comparative statements don't include predecessor report |
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Definition
Current (Successor) auditor should indicate in intro...
- not name other auditor
- date of previous opinion
- type of opinion
- reasons for other than unqualified report
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Term
| 5 resonsibilities if comparative statements DO include predecessor report |
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Definition
predecessor should...
- read FS and compare to prior years
- obtain rep letter from successor
- obtain rep latter from management
- use original date if not revised and reissue
- if revised, dual date
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Term
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Definition
- conditions existed on or before BS date
- requires FS adjustment
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Term
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Definition
- condition arises after B/S date
- disclosure required
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Term
| mnemonic for auditor responsibilities for subsequent events |
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Definition
P- review Post balance sheet transactions
R-obtain Representation letter from management
Inquiry
M- read Minutes of meetings
E- Examine interim statements and compare with F/S under audit |
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Term
| auditor responsibility after intial report date |
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Definition
| no active responsibility but must use professional judgment if becomes aware of aubsequent event |
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Term
| 4 auditor indication requirements when reporting on condensed F/S |
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Definition
- auditor audited and expresses opinion on complete FS
- date of the auditor's report on the complete FS
- type of opinion expressed
- whether info in condensed F/S is fairly express in relation to FS as a whole
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Term
| 5 types of special reports |
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Definition
- other comprehensive basis of accounting
- special elements, accounts, or items
- compliance with contractual/regulatory obligations
- financial presentation to comply with regulatory requirements
- prescribed form presentation
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