Auditing - CPA Exam fully solved &
updated
Auditing Standards Board (ASB) - ANSWER-Technical body within the AICPA
that holds the authority to set the rules for appropriate audits of organizations
that do not issue securities to the public (often referred to as privately held
organizations).
Statements on Auditing Standards (SAS) - "Should" - ANSWER-Presumptively
Mandatory
Statements on Auditing Standards (SAS) - "Must" - ANSWER-Unconditional
requirement
Generally Accepted Accounting Principles (GAAP) - ANSWER-a set of
accounting standards that is used in the preparation of financial statements.
Encompasses the conventions, rules, and procedures necessary to define
accepted accounting practice at a particular time.
Who may be deemed to be "Those Charged with Governance" - ANSWER-
Corporate trustee, board of directors, audit committee, and/or executive
management
Auditor's Responsibilities - ANSWER--Required to assess the risk of fraud
-Comply with relevant ethical requirements
-Plan and perform audit with professional skepticism
-Exercise professional judgment
-Obtain sufficient appropriate audit evidence to reduce audit risk to an
acceptably low level
, Auditing - CPA Exam fully solved &
updated
Planning Phase of an Audit - ANSWER-1. Discuss the timing of the audit
procedures with the client's management
Percentage of Coverage Rule - Low Risk - ANSWER-20% of federal funding spent
by the entity
Percentage of Coverage Rule - NOT low risk - ANSWER-40% and above of
federal funding spent by the entity
Generally Accepted Government Auditing Standards (GAGAS) "Yellow Book" -
ANSWER-Provides framework for auditors of government entities, entities that
receive government awards and other gov orgs.
GAGAS requirements are in ADDITION to the requirement contained in the
AICPA standards
requires irregularities or illegal acts to be reported to the counterparty to the
contract
Office of Management and Budget (OMB) - ANSWER-Has the primary authority
to develop requirements for performing federal program compliance audits in
Accordance with Single Audit Act
Cognizant Agency - ANSWER-federal agency responsible for reviewing,
negotiating, and approving cost allocation plans, indirect cost rates and more.
This is under OMB
, Auditing - CPA Exam fully solved &
updated
most likely assigned to auditee who the fed agency provides the most funding
to the auditee
Single Audit - Which Guidelines to Follow? - ANSWER-both GAAS and GAGAS
guidelines are applicable
Single Audit Required When - ANSWER-the entity spends $750,000 or more per
fiscal year in federal awards, grants, or funds
the entity spends funds from one or more than one federal program
if the entity only expends funds from one program, it "may" be eligible for a
program-specific audit versus a single audit.
Agreed-Upon Procedures - ANSWER-practitioner is engaged to issue a report of
findings based on specific procedures performed on underlying subject matter.
CPA must be Independent!!
practitioner's report should include list of the procedures perform and related
findings.
Compilation Engagement - ANSWER--No Assurance Given
-Does not need to be Independent
-Goal is to assist management in present financial info in the form of FS
-Accountant is required to read the FS & consider if they are good
updated
Auditing Standards Board (ASB) - ANSWER-Technical body within the AICPA
that holds the authority to set the rules for appropriate audits of organizations
that do not issue securities to the public (often referred to as privately held
organizations).
Statements on Auditing Standards (SAS) - "Should" - ANSWER-Presumptively
Mandatory
Statements on Auditing Standards (SAS) - "Must" - ANSWER-Unconditional
requirement
Generally Accepted Accounting Principles (GAAP) - ANSWER-a set of
accounting standards that is used in the preparation of financial statements.
Encompasses the conventions, rules, and procedures necessary to define
accepted accounting practice at a particular time.
Who may be deemed to be "Those Charged with Governance" - ANSWER-
Corporate trustee, board of directors, audit committee, and/or executive
management
Auditor's Responsibilities - ANSWER--Required to assess the risk of fraud
-Comply with relevant ethical requirements
-Plan and perform audit with professional skepticism
-Exercise professional judgment
-Obtain sufficient appropriate audit evidence to reduce audit risk to an
acceptably low level
, Auditing - CPA Exam fully solved &
updated
Planning Phase of an Audit - ANSWER-1. Discuss the timing of the audit
procedures with the client's management
Percentage of Coverage Rule - Low Risk - ANSWER-20% of federal funding spent
by the entity
Percentage of Coverage Rule - NOT low risk - ANSWER-40% and above of
federal funding spent by the entity
Generally Accepted Government Auditing Standards (GAGAS) "Yellow Book" -
ANSWER-Provides framework for auditors of government entities, entities that
receive government awards and other gov orgs.
GAGAS requirements are in ADDITION to the requirement contained in the
AICPA standards
requires irregularities or illegal acts to be reported to the counterparty to the
contract
Office of Management and Budget (OMB) - ANSWER-Has the primary authority
to develop requirements for performing federal program compliance audits in
Accordance with Single Audit Act
Cognizant Agency - ANSWER-federal agency responsible for reviewing,
negotiating, and approving cost allocation plans, indirect cost rates and more.
This is under OMB
, Auditing - CPA Exam fully solved &
updated
most likely assigned to auditee who the fed agency provides the most funding
to the auditee
Single Audit - Which Guidelines to Follow? - ANSWER-both GAAS and GAGAS
guidelines are applicable
Single Audit Required When - ANSWER-the entity spends $750,000 or more per
fiscal year in federal awards, grants, or funds
the entity spends funds from one or more than one federal program
if the entity only expends funds from one program, it "may" be eligible for a
program-specific audit versus a single audit.
Agreed-Upon Procedures - ANSWER-practitioner is engaged to issue a report of
findings based on specific procedures performed on underlying subject matter.
CPA must be Independent!!
practitioner's report should include list of the procedures perform and related
findings.
Compilation Engagement - ANSWER--No Assurance Given
-Does not need to be Independent
-Goal is to assist management in present financial info in the form of FS
-Accountant is required to read the FS & consider if they are good
