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ACTG 410
Professional Standards
33
Accounting
Undergraduate 4
02/12/2013

Additional Accounting Flashcards

 


 

Cards

Term
what are public entities referred to as?
Definition
issuers
Term
what are private entities referred to as?
Definition
non-issuers
Term
Name the rule making body for:
1)ISSUERS
2)NON-ISSUERS
3)Governmental entities
4)Foreign entities
Definition
1) PCAOB
2) AICPA Auditing Standards Board (ASB)
3) U.S. Gov't. Accountability Office (GAO)
4) International Auditing and Assurance Standards Board (IAASB)
Term
Name the standards for each:
1)ISSUERS
2)NON-ISSUERS
3)Governmental entities
4)Foreign entities
Definition
1)AS (Auditing Standards- 15 of them)
2)SAS (Statements of Auditing Standards- 126 of them)
3)Gov't. Auditing Standards (yellow book)
4) International Standards on Auditing (ISA)
Term
what are the standards for audits?
Definition
Generally Accepted Auditing Standards (GAAS)
Term
What is the difference b/t auditing standards and auditing procedures?
Definition
Audit procedures are "steps" that you take to achieve the standards. (same from audit to audit)

Procedures are tailored for specific engagements. (can be different b/t engagements)
Term
What does GAAS measure?
Definition
quality of auditors' performance
Term
Name Attestation 10 Commandments (think S-T-R-I-D-P-E-C-C-R-L
Definition
-Subject matter knowledge
-Training in attestation
-Reasonable criteria & consistent measurement
-Independence
-Due professional care
-planning & supervision
-evidence
-character of engagement
-conclusions about criteria
-reservations
-limitations on report use
Term
Audit: General Standards (AU 200)- Responsibilities (think T-I-D)
Definition
-Training in auditing
-Independence
-Due professional care (prof. skepticism)
Term
Audit: Standards of Field Work (AU 300)- Performance (think P-I-E)
Definition
-Planning & supervision
-Consideration of INTERNAL Control
-Sufficient, competent EVIDENCE
Term
Audit: Standards of Reporting (AU 400-500)- Reporting (think G-I-I-E)
Definition
-Conformity with GAAP
-Inconsistency
-Inadequacy of disclosure
-Expression of opinion
Term
AU-C Section (think what?)
Definition
audit standards
Term
AT's (what are they)
Definition
Attestation Standards
Term
Are there assurance standards?
Definition
NO.
Term
What are SASs?
Definition
sub amendments to AU to adress problems that arise
Term
What are 2 overall objectives of audit?
Definition
-Obtain REASONABLE ASSURANCE about whether the F/S's as a whole are free from MATERIAL misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the F/S's are presented fairly, in all material respects, in accordance w/ an APPLICABLE FINANCIAL REPORTING FRAMEWORK (GAAP)

-Report om the F/S's and communicate as required by GAAS
Term
Does reasonable assurance = absolute assurance?
Definition
NO.
Term
List the Requirements for an audit (Overall Objectives)
Definition
-Ethical requirements
-Prof. skepticism
-Prof. judgement
-Sufficient appropriate evidence & audit risk
-Conduct in accordance w/ GAAS
Term
What are the ethical requirements?
Definition
-Public interest (primarily acting for public)
-Integrity
-Objectivity & Independence (no conflict of interest)
-Due Care (hustle like every other auditor out there)
-Scope & Nature of Services
Term
define Prof. Skepticism
Definition
don't assume clients are right, and don't assume they are wrong; always ask for evidence; "trust but verify"
Term
define Prof. Judgement
Definition
when rules are hazy and you come up w/appropriate treatment; practice is only way to obtain this; pertains to vague decisions (the "grey" area)
Term
PCAOB reviews ___ standards for audit and ___ standards for the CPA firms
Definition
GAAS; quality control
Term
PCAOB monitors CPA firms to make sure they are monitoring _____.
Definition
quality control standards
Term
What are the control standards for accounting firms?
Definition
-Leadership Responsibilities for Quality on audits (bull's eye on partner)
-Relevant ethical requirements (independence)
-Acceptance & continuation of clients
-Assignment of engagement teams (not only staff members)
-Engagement performance
-Monitoring (firms must monitor all the above)
Term
Who establishes standards (AS's) and who must approve them?
Definition
PCAOB; SEC must approve
Term
What are INTERIM AUDITING STANDARDS and what can they be modified or amended by?
Definition
ASB (from AICPA); can be modified by AS's (from PCAOB)--> any SAS's that don't conflict with PCAOB should be abided by
Term
How does PCAOB monitor accounting firms and how often?
Definition
by inspections:
-Firms auditing > 100 public entities: annually
-Firms auditing < 100 pub. entities: every 3 years
Term
What happens if PCAOB discovers a problem and the accounting firm does not correct it?
Definition
Quality Control Criticism: made public by revealing deficiencies online
Term
List the types of audit opinions
Definition
-Unmodified (OK)
-Modified (OK except for..)
-Adverse (not OK)
-Disclaimer (No Comment)
Term
define UNMODIFIED
Definition
GOOD
Term
define MODIFIED
Definition
not as good as modified but still has value
Term
define ADVERSE
Definition
F/S's not fairly stated; auditor has right to give this opinion; client will make adjustments to avoid this which is why it is not common
Term
define DISCLAIMER
Definition
-same as "adverse"
-can't see enough info. to give audit opinion
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