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  • Audit Notes: Chapters 1-3

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    CPA Exam Notes for Auditing. Chapters 1-3

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    CPA Exam Notes for Auditing. Chapters 1-3

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    9K Ansichten9 Seiten

    Audit Notes: Chapters 1-3

    Hochgeladen von

    Future CPA
    CPA Exam Notes for Auditing. Chapters 1-3

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Als PDF herunterladen oder online auf Scribd lesen
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    von 9
    ost ‘The responsibilty of the Management in the financial statoment: # Accuracy #Folloning GAAP # Time lime +# Relevance of information ‘Statement on Auditing Standards (SAS) ssuad by Audltng Standard Board (ASB) Professional care addresses the Auditor performance on the enity engagement ‘The cbjectve of expressing the opinion isto prevent misnterpretation of degree ofthe responsiblity thatthe Auditors assuming Unqualified Report Tie Tnireductory_ ‘Scope. ‘Opinion Tedopendent Sot of fnancal 7 Folowing GAAS Expressing an opinion #Ngt Responsibilty (preparation) | # Plan & perform Aud with + Following GAAP + Audit Resp. (express opinion) reasonable assurance # Examining on atest basis, ‘evidence supporting the amount and disclosure in the FS. ‘# assessing the accounting Principle 4 significant estimates made by Management Modified unqualified opinion ‘Additional Paragraph preceding an opinion # Division of responsibilty (modification by wording) # Qualified, Disclaimer, ang Adverse +# Emphaels of a matter (related party, subsequent events... 2) # Emphasis of matter and Justified accounting departure +# Omission of SEC quarterly review report # Updating prior opinion + Going concer + Justified departure from GAAP. ‘Additional Paragraph following an opinion 4 Jusified lack of consistency # Mocifiod unqualified report + Omission of supplementary information # Special report for compliance ustited departure from GAAP, Additional Parag will be describing the departure, estimate the effec, and why the GAAP will be a mmisleading Going Concer ‘Ruch procedure Events Mitigating factor Analytical procedure *¥ Financial oiouties ¥ Postponed expenditure # Debt compliance (loan agreement) # Negative trent (o0sses) # Disposed assets ‘# Minutes # Internal matter (work stoppage) # Increase equity Config with outsiders ‘# External matter (Legal case) ‘# Lease than purcnase # Legal ltgation ‘#Borrow money # Subsequent event Justified Lack of consistency (Accounting principle change from year to year) + fFtho Audtore is jelfied withthe entity changos on accounting principle (and the change is materia) then the Auditor should issue an Unqualified report with an explanatory paragraph folowing the opinion ‘the Auditor fs not justified withthe material changes then qualified or adverse opinion should be given based on materialty Wa the explanstory paragraph, the Auditor should state a note reference for the basis of a new accountng principle # Immaterial change will note cause to modification or quaiication # Correction of an error rom non-GAAP to GAAP) would result to modification 4 Retroactive restatement would not cause a modification (Depreciation method change) +# Protroactive material restatement would cause a modification GAAS & GAAP Problem Report Tabredustory ‘Scope ‘Opinion: [Gualiied GAAP ‘No changes No changes Woatied (Except fr [Qualified GAAS: No charges [NodTied (Except on the o¥owing]| —Mosied (Except for) [Adverse No changes: ‘No changes. Mocifiod (Not fairy stated) ae Modified (Were unable to obtain an pene Mosified (We were enagoged to audit) oon assurance) Reporting with different opinion +# Unqualified last year with quaifid this year ==> Issue quelfied eport forthe current year and refer to previous year in opinion part + Unqualified current year and disclaimer last yaar ==>> Modified the scope (except forthe following), adé explanatory paragraph for desering the opinion of previous year, ard in opinion paragraph state the opinion forthe current year (e.g fatty stated) and for previous year (disclaining an opinion) Reporting with predecessor Auditor 4# Ifthe previous Audit report will be presented, then the predecessor Auditor need Io read the current report, compare wih his previous report, nd obtain Rep leter from Management and from the current Auctor #17 the previous Audit report will not be presented, then the current report (n the introductory paragraph) should state thatthe previous. teport been conducted by other auctor, date ofthat report, type of opinion, and reason for not unqualiying (if glen). ‘Audit procedure for subsequent events #cuof # Compare the current financial with latest subsequent interim finaci # inquiries Minutes # Rep letter ‘Sequence process by the Autor for any miss-statement Identified during the subsequent period 1 Search if there any person are elyng on the financial statement 2. Advising the client to revised or disciosed + ifthe cient management refused to revised, then the Autor need to otily the higher Authorities body (BoD) 4. Ifalso been revised, the Auditor need to determined who relying on the financial statement ‘5 Notlying the users and others (such as Regulatory body) of not relying on such information Reporting on other information while FS Audit Taformation Required Supplement ‘Segement | Auditor submitted accompaying the FS. Information mation document. eee FW Auditor should read the [Finguives [F Reporing is required! Roporing is requredjf condensed shoud lacoompanying FS | Determine the |# Omiting the Joc marked in every |# Reporting 's permissible consistency with FS segment, then losses |# Incudes in Rep eter Adverse or qualified ft Auditor express on |# Reporting is permissible lcomplete FS: |# Omiting sup infor, then modify unquaitied report Selected FS | Reporting on application |# We restriction & ie Reporting abcounting = Imposed on auditing the CPA lathe continuing accounting 's the Mat |# CPA wil report on the ent Acc application |# Accounting report on p.52 l# Continuing accountant is tne preparer ot ‘Quality Control Standard ‘The QCS rules and reguations been issued by the Quality Contl Standard Committee Not following QCS not mean that wo are not following GAAS (Cost and Benet factor might be the valid reason for not applying one of the GCS elements. The element of ACS 4 Acoeptance & Continues + Continues Monitoring 4 Assurance on engagement performance # Independence, iniogty, and objective # Personal Management ‘Acceptance & Continues ‘The main purpose ofthe A&C isto minimize the BiceRocd of the clint integrity Independence, integrity, and objective + Independence infact & appearance 4# The Auait engagement cannot be performed while performing atthe same tine engagement tke Bookkeeping, Intemal aut, HR function services, Investment sees, accounting information system. # The Aut engagement can be performed a the same time while performing Tax services engagement. ‘80 requirements # Aust fem cannot parform an Audt engagement for companies CFO or CEO were an Ex

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