Audit standards require a ________ be used for all audits - ANSWER--
Audit standards require a standard format of the audit report be used for
all audits
Standard Unmodified Report - ANSWER--Used when auditors have
determined the financial statements are presented fairly in accordance
with the applicable financial reporting framework
Also called standard, unmodified/unqualified, or "clean" report
Sections of an unmodified audit report of a private company -
ANSWER--1. Independent Auditor's Report
2. To the owner's of company:
3. Report on the Financial Statements (IDs the F/S and what service
performed)
4. Management's Responsibility for the Financial Statements (Prep and
fair presentation of the F/S; design, implementation, and maintenance of
IC; F/S free from material misstatement whether due to fraud or error)
5. Auditor's Responsibility (Express an opinion, used auditing standards
(ASB), reasonable assurance F/S free from material misstatement,
Obtain audit evidence and Procedures on auditor's judgment, considered
IC relevant to design audit procedures, no expressed opinion on IC,
evidence obtained sufficient and appropriate to provide opinion)
,6. Opinion (present fairly, in all material respects, financial opinion in
accordance with accounting principles GAAP)
7. CPA firm signature
8. Date end of field work, evidence gathering complete
What does second paragraph of Auditor's Responsibilities represent? -
ANSWER--How an audit is performed
PCAOB standards use the term ______ report - ANSWER--Unqualified
report. Equivalent to unmodified used in private companies and
sometimes used interchangeably as unmodified used to be used for
private companies too.
Sections of Unqualified audit report of public company - ANSWER--1.
Report of Independent Registered Public Accounting Firm (registered w/
PCAOB)
2. To the shareholders and Board of Director of company
3. Opinion on the Financial Statements (note moves to top of report but
stmt stays the same as private company)
4. We have also audited IC ... and reference IC report
5. Basis for opinion (F/S responsibility of company's mgmt, auditor
responsibility to express an opinion and be independent
6. What is an audit section
7. Signature of audit firm
,8. Date (end of fieldwork)
9. Statement about auditor tenure
What is unique to the public company audit report? - ANSWER--1. Title
- registered with PCAOB
2. Opinion moves from last paragraph to top of report
3. Paragraph referencing the audit of IC as public companies are
required to have an audit of ICFR and auditors issue a separate opinion
for that audit
4. Basis for opinion paragraph - less detail than private company and
that registered with PCAOB and independence requirements of the SEC
and other federal securities laws
5. Scope paragraph - explicit statement that PCAOB audit standards
were followed
6. Audit tenure - states the year audit firm began serving consecutively
as the company's auditor
Qualified or Adverse opinion - ANSWER--Material departures and
client refuses to make corrections
Qualified or Disclaimer of Opinion - ANSWER--Material limitation
known as "Scope Limitation" on auditor's ability to gather sufficient
appropriate evidence
, Disclaimer of Opinion - ANSWER--Auditor is not independent
PCAOB Auditing Standard 2201 states_____ - ANSWER--PCAOB
Auditing Standard 2201 An Audit of Internal Control Over Financial
Reporting That Is Integrated with An Audit of Financial Statements
states that auditors must conduct an integrated audit for public
companies
AS 2201 requires - ANSWER--a standard format of the audit report be
used for all audits of effectiveness of ICFR
Components of the unqualified report on ICFR - ANSWER--1. Title -
independent is also in the title of this report and registered with PCAOB
2. Address - addressed to S/H and Board of Directors of company
3. Opinion paragraph - explains an audit of ICFR was conducted
references the COSO IC - Integrated Framework as criteria. Second
sentence states auditor's opinion
4. Paragraph referencing the F/S audit and the opinion given
5. Basis for opinion paragraph - states different responsibilities of mgmt
and auditors. References registration with PCAOB and independence
requirements of SEC and other fed. security laws
6. Scope paragraph - explains auditor's used PCAOB standards. Auditors
only required to obtain reasonable assurance and did so as basis for
opinion
Audit standards require a standard format of the audit report be used for
all audits
Standard Unmodified Report - ANSWER--Used when auditors have
determined the financial statements are presented fairly in accordance
with the applicable financial reporting framework
Also called standard, unmodified/unqualified, or "clean" report
Sections of an unmodified audit report of a private company -
ANSWER--1. Independent Auditor's Report
2. To the owner's of company:
3. Report on the Financial Statements (IDs the F/S and what service
performed)
4. Management's Responsibility for the Financial Statements (Prep and
fair presentation of the F/S; design, implementation, and maintenance of
IC; F/S free from material misstatement whether due to fraud or error)
5. Auditor's Responsibility (Express an opinion, used auditing standards
(ASB), reasonable assurance F/S free from material misstatement,
Obtain audit evidence and Procedures on auditor's judgment, considered
IC relevant to design audit procedures, no expressed opinion on IC,
evidence obtained sufficient and appropriate to provide opinion)
,6. Opinion (present fairly, in all material respects, financial opinion in
accordance with accounting principles GAAP)
7. CPA firm signature
8. Date end of field work, evidence gathering complete
What does second paragraph of Auditor's Responsibilities represent? -
ANSWER--How an audit is performed
PCAOB standards use the term ______ report - ANSWER--Unqualified
report. Equivalent to unmodified used in private companies and
sometimes used interchangeably as unmodified used to be used for
private companies too.
Sections of Unqualified audit report of public company - ANSWER--1.
Report of Independent Registered Public Accounting Firm (registered w/
PCAOB)
2. To the shareholders and Board of Director of company
3. Opinion on the Financial Statements (note moves to top of report but
stmt stays the same as private company)
4. We have also audited IC ... and reference IC report
5. Basis for opinion (F/S responsibility of company's mgmt, auditor
responsibility to express an opinion and be independent
6. What is an audit section
7. Signature of audit firm
,8. Date (end of fieldwork)
9. Statement about auditor tenure
What is unique to the public company audit report? - ANSWER--1. Title
- registered with PCAOB
2. Opinion moves from last paragraph to top of report
3. Paragraph referencing the audit of IC as public companies are
required to have an audit of ICFR and auditors issue a separate opinion
for that audit
4. Basis for opinion paragraph - less detail than private company and
that registered with PCAOB and independence requirements of the SEC
and other federal securities laws
5. Scope paragraph - explicit statement that PCAOB audit standards
were followed
6. Audit tenure - states the year audit firm began serving consecutively
as the company's auditor
Qualified or Adverse opinion - ANSWER--Material departures and
client refuses to make corrections
Qualified or Disclaimer of Opinion - ANSWER--Material limitation
known as "Scope Limitation" on auditor's ability to gather sufficient
appropriate evidence
, Disclaimer of Opinion - ANSWER--Auditor is not independent
PCAOB Auditing Standard 2201 states_____ - ANSWER--PCAOB
Auditing Standard 2201 An Audit of Internal Control Over Financial
Reporting That Is Integrated with An Audit of Financial Statements
states that auditors must conduct an integrated audit for public
companies
AS 2201 requires - ANSWER--a standard format of the audit report be
used for all audits of effectiveness of ICFR
Components of the unqualified report on ICFR - ANSWER--1. Title -
independent is also in the title of this report and registered with PCAOB
2. Address - addressed to S/H and Board of Directors of company
3. Opinion paragraph - explains an audit of ICFR was conducted
references the COSO IC - Integrated Framework as criteria. Second
sentence states auditor's opinion
4. Paragraph referencing the F/S audit and the opinion given
5. Basis for opinion paragraph - states different responsibilities of mgmt
and auditors. References registration with PCAOB and independence
requirements of SEC and other fed. security laws
6. Scope paragraph - explains auditor's used PCAOB standards. Auditors
only required to obtain reasonable assurance and did so as basis for
opinion
