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CA Audit & Assurance AAA3
Unit 1 - Assurance Purpose & Framework
67
Accounting
Post-Graduate
09/18/2014

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Term
IFAC stands for
Definition
International Federation of Accountants
Term
IAASB stands for
Definition
International Auditing and Assurance Standards Board
Term
IESBA stands for
Definition
International Ethics Standards Board for Accountants
Term
IFAC is
Definition
Global organisation for the accounting profession
Term
IFAC over sees the operations of
Definition
IAASB & IESBA
Term
IAASB is
Definition
An independant standard setting body
Term
IAASB sets international standards for
Definition
Auditing
Quality Control
Reviews
Other assurance service
Term
IESBA is
Definition
An independant standard setting board
Term
IESBA sets international standards for
Definition
Ethics
Other issues effecting accountants
Term
AUASB stands for
Definition
Auditing and Assurance Standards Board
Term
FRC stands for
Definition
Financial Reporting Council
Term
The FRC was created under which Act?
Definition
The Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act)
Term
The FRC's responsibilities are
Definition
Oversight of the AUASB
Monitoring development of international auditing standards
Furthering the development of a single set of Auditing Standards for use worldwide
Term
What is the primary responsibility of the AUASB
Definition
Developing and maintaining Auditing and Assurance Standards and related guidance in Australia
Term
ASA stands for
Definition
Australian Auditing Standard
Term
What are "force of law" auditing standards?
Definition
Standards that are legislative instruments created by the AUASB under s.336 of the Corporations Act, which apply to entities registered under the Corporations Act, and are legally enforceable.
Term
APESB stands for
Definition
Accounting Professional and Ethical Standards Board
Term
APESB is an initiative of
Definition
ICAA and CPA Australia
Term
APESB issues
Definition
Ethics standards
Term
APES standards issued by APESB outline
Definition
the reponsibilities of professional accountants to act professionally and ethically
Term
APESB issued standards are consistent with
Definition
IESBA issued standards and tailored for the Australian business environment
Term
APES 110 is called
Definition
Code of Ethics for Professional Accountants
Term
APES 110 is the equivalent of the
Definition
IESBA Code
Term
CALDB stands for
Definition
Companies Auditors and Liquidators Disciplinary Board
Term
CALDB was established under what Act?
Definition
ASIC Act
Term
CALDB has the power to
Definition
enforce penalties if it determines that a registered company auditor has failed to carry out their duties properly or is unfit to be registered
Term
Which sections of the Corporations Act requires certain entities to prepare an annual financial report and have it audited?
Definition
s.292
Term
If an auditor faily to comply with the mandatory paragraphs of the standards for "other engagements" they are subject to
Definition
professional penalties
Term
If an auditor faily to comply with the mandatory paragraphs of the standards for "and audit of an entity registered under the Corporations Act" they are subject to
Definition
professional penalties and legal penalties
Term
The International Framework is issued by
Definition
IAASB (International Auditing and Assurance Standards Board
Term
The International Framework defines and describes
Definition
the elements and objectives of an assurance engagement
Term
The International Framework identifies
Definition
the engagements to which Auditing and Assurance Standards apply
Term
What are the five elements of an assurance engagement
Definition
1 - a three party relationship involving a practitioner, a responsible party, and intended users
2 - an appropriate subject matter
3 - suitable criteria
4 - sufficient appropriate evidence
5 - a written assurance report in the form appropriate to a reasonable assurance engagement or a limited assurance engagement
Term
What are the two types of assurance engagements
Definition
Reasonable assurance engagements
Limited assurance engagements
Term
What are the five key principles regarding assurance engagements
Definition
1. Assurance engagement acceptance
2. Professional scepticism
3. Materiality
4. Assurance Risk
Term
What are the requirements for Assurance engagement acceptance and what part of the standards addresses this key principal?
Definition
1. Ethical requirements will be satisfied

2. The five elements of an assurance engagement are present

3. Framework para 17
Term
What are the requirements for professional scepticism and what part of the standards addresses this key principal?
Definition
1. Using a questioning mind
2. Being alert to evidence the contradicts the reliability of documents
3. Framework para 40
Term
What are the requirements for materiality and what part of the standards addresses this key principal?
Definition
1. amounts considered to small to affect users' decisions are given little or no audit effort
2. Framework para 47
Term
What are the requirements for assurance risk and what part of the standards addresses this key principal?
Definition
1. practitioner must reduce assurance risk to an acceptably low level by obtaining sufficient appropriate evidence
2. Framework para 48
Term
What are the key differences between the International Framework and the Australian Framework
Definition
Paras 7 - Aus 7.8 in the definitions section and para 39 - Aus 39-4 in the evidence section
Term
Under what section of the Corporations Act are auditors compelled to comply with Australian Auditing Standards?
Definition
s.307A

(for other assurance engagements not performed under the corporations act, APES 210 requires members of ICAA, CPA and IPA to comply with AUASB standards
Term
What are three overarching pronouncements issued by the IAASB?
Definition
1. International Preface (Preface to the International Quality Control, Auditing, Review, Other Assurance and Related Services Pronouncements)

2. International Standard on Quality Control 1 (ISQC1), Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements

3. International Framework for Assurance Engagements
Term
What are the four types of engagements
Definition
1. Audits of historical financial information
2. Reviews of historical financial information
3. Assurance engagements other than audits or reviews of historical financial information
4. Related services (non-assurance engagements)
Term
ISA's are....
Definition
International Standards on Auditing
Term
ISRE's are...
Definition
International Standards on Review Engagements
Term
ISAE's are
Definition
International Standards on Assurance Engagements
Term
ISRS's are...
Definition
International Standards on Related Services
Term
ISA's, ISRE's, ISAE's and ISRS's are collectively referred to as....
Definition
IAASB's Engagement Standards
Term
Name the two types of engagement when the subject matter is historical financial information such as financial statements
Definition
Audit or review
Term
What is the level of assurance for a financial statement audit
Definition
Reasonable assurance
Term
What is the level of assurance for a financial statement review
Definition
Limited assurance
Term
Which standards apply to a financial statement audit
Definition
ISA's
Term
Which standards apply to a finanicial statement review
Definition
ISRE's
Term
What is a force of law standard?
Definition
AUASB standards issued under s.336 of the Corporations Act to be used in the audit of entities regulated under this Act.
Term
Force of Law Standards include
Definition
Most ASA's
ASQC1
AREA 2410 and ASRE 2415
Term
What are the two key differences between the IAASB pronouncements and AUASB pronouncements
Definition
1. AUASB Forward
2. ASA 101
Term
ASQC1 applies to
Definition
all firms that conduct any audits, reviews or other assurance engagements
Term
Which ASA prescribes which sections of an ASA are mandatory and which contain explanatory material?
Definition
ASA 101
Term
Name the mandatory components of an ASA
Definition
1. Application
2. Operative Date
3. Objective(s)
4. Definiation(s)
5. Requirements
Term
Name the explanatory material included in an ASA
Definition
1. Application
2. Introduction
3. Application and other Explanatory Material
4. Conformity with International Standards on Auditing
5. Appendices
Term
If an engagement provides no assurance, what type of AUASB Standards will apply?
Definition
ASRS (Standards on Related Services)
Term
If an engagements provides assurance but the subject matter is not historical, what type of AUASB standards will apply?
Definition
ASAE (Standards on Assurance Engagements)
Term
If the engagement will provide assurance, uses historical data and is a review, what type of AUASB standards will apply?
Definition
ASRE (Standards on Review Engagements)
Term
If the engagement will provide assurance, uses historical data and is an audit, what type of AUASB standards will apply?
Definition
ASA (Australian Auditing Standards)
Term
ISA 200 deals with
Definition
the auditor's overall responsibilities when conducting and audit of financial statements
Term
The auditors overall objectives when conducting an audit of financial statements (ISA 200) are
Definition
1 - to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement

2. To report on the financial statements and communicate those findings as required by ISA's
Term
The five key requirements for an auditor in the conduct of an audit (ISA 200) relate to:
Definition
Ethics
Professional scepticism
Professional judgement
Sufficient appropriate audit evidence and audit risk
Conduct of an audit in accordance with ISA's
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