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Details

Auditing and Assurance Services
The CPA Profession
27
Accounting
Undergraduate 4
09/18/2011

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Cards

Term
What are the Big Four international firms
Definition
Deloitte and TOuche, ERnst and Young, PricewaterhouseCoopers, KPMG
Term
What are the activities of a CPA firm
Definition
accounting and bookeeping services, tax services, and management consulting services
Term
According to the Sarbanes-Oxley Act and SEC, what is a restriction on auditors?
Definition
they can't provide many consulting services to public compnay audit clients
Term
what are the three main factors that influence the organizational structure of all firms
Definition
1. the need for independence from clients
2. the importance of a structure to encourage competence
3. the increased litigation risk faced by auditors
Term
What did the Sarbanes-Oxley Act establish
Definition
the public company accounting oversight board (PCAOB)
Term
What does the PCAOB do?
Definition
provides oversight for auditors of public companies, established auditing and quality ocontrol standards, and performs inspections of the quality controls at audit firms performing those audits
Term
What does the SEC do?
Definition
assist in providing investors with reliable information upon which to make investment decisions
Term
What are some form required by the SEC for CPA's to know about
Definition
Form S-1
FOrm 8-K
Form 10-K
From 10-Q
Term
What is a form S-1
Definition
must be completed when a company plans to issue new securities to the public
Term
What is a form 8-K
Definition
to report significant events that are of interest to public investors
Term
WHat is a form 10-K
Definition
Must be filed with 60-90 days after the end of the fiscal year...contains extensive detailed financial info including audited f/s
Term
What does the AICPA do
Definition
Sets professional requirements for CPAs, conducts research, and publishes materials on many different subject related to accounting, auditing, attestation, and assurance services, management consulting services , and taxes
Term
The four major areas in which the AICPA has authority to set standards and make rules are as follows:
Definition
1. Auditing Standards (SASs)
2. Compilation and review standards
3. Other attestation standards
4. Code of professional conduct
Term
What is the ISA?
Definition
International Standards on Auditing which is issued by the IAASB of the IFAC
Term
What are auditing standards for private companies and other entities established by and what are they called?
Definition
ASP of the AICPA
GAAS
Term
Describe the relation of U.S. and International Auditing Standards
Definition
• International Standards on Auditing: applicable to entities outside the U.S.
• GAAS: private entities in the US
• PCAOB Auditing Standards: applicable to U.S. Public Companies and other SEC registrants
Term
What are the 3 categories of GAAS?
Definition
• General Standards
• Standards of Field Work
• Reporting Standards
Term
What are the 3 GAAS that are considered “general standards”
Definition
• Adequate training and proficiency
• Independence in mental attitude
• Due professional care
Term
What are the 3 GAAS under field work
Definition
• Proper planning and supervision
• Sufficient understanding of the entity, its environment, and its internal control
• Sufficient appropriate evidence
Term
What are the GAAS under reporting standards
Definition
• Require auditor to prepare a report on the f/s taken as a whole, including disclosures, whether in accordance with GAAP
Term
The 10 GAAS are too general, so auditors turn to what for more specific guidance
Definition
SASs issued by the ASB
Term
Under the AICPA Code of Professional Conduct what kind of literature is required to be followed?
Definition
Authoritative literature- GAAS, and SASs
Term
AU numbers indicate classifications of SASs. What are the numbers and what do they represent?
Definition
2- general standards
3- field work standards
4, 5, 6- reporting standards
Term
What is quality control?
Definition
Comprises themethods used to ensure that the firm meets its professional responsibilities to the clients and other
Term
What is the difference between quality controls and GAAS?
Definition
Quality controls- est for the entire CPA Firm
GAAS- individual engagements
Term
What are the 6 Elements of Quality Control
Definition
Leadership responsibilities, releveant ethical requirements, acceptance and continuation of clients and engagements, human resources, engagement performance
Monitoring
Term
What is peer review? And what is it’s purpose
Definition
Review, by CPAs, of a CPA firm’s compliance with its quality control system. Purpose is to determine whether the firm has developed adequate quality control policies and procedures and follows them in practice
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