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Related Flashcards
Related Topics
Cards In This Set
| Front | Back |
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An
assurance engagement would include
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-Giving
an opinion on a prize promoter’s claim about the amount of sweepstakes prizes
awarded in the past
-Giving an opinion on the conformity of the financial statements of a university with generally accepted accounting principles -Giving an opinion on the fair presentation of a newspaper’s circulation data - |
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A
determination of cost savings obtained by outsourcing cafeteria services is
most likely to be an objective of
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Operational
auditing
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The
primary difference between operational auditing and financial auditing is that
in operation auditing
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The
operational auditor is seeking to help management use resources in the most
effective manner possible
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According
to the AICPA, the purpose of an audit of financial statements is to
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Enhance
the degree of confidence that intended users can place in the financial
statements
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Bankers
who are processing loan applications from companies seeking large loans will
probably ask for financial statements audited by an independent CPA because
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they generally see a potential conflict of interest between
company managers who want to get loans and the bank’s needs for reliable
financial statements
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The
Sarbanes-Oxley Act of 2002 prohibits public accounting firms from providing the
following services to an audit client:
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-Bookkeeping
services
-Internal audit services -Valuation services |
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Independent
auditors of financial statements perform audits that reduce
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information risk faced by investors
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The
primary objective of compliance auditing is to
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determine whether auditee personnel are following laws,
rules, regulations, and policies
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These
requirements are usually necessary to become licensed as a certified public
accountant
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-Successful completion of the Uniform CPA
Examination-
|
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The
objective in an auditor’s review of credit rating of a client’s customers is to
obtain evidence related to management’s assertion about
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Valuation
and allocation
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Someone
verbally asserting that all expenses for the year have been recorded in the
accounts is
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Not
considered a sufficient basis for a CPA to conclude that all expenses have been
recorded
|
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The
risk to investors that a company’s financial statements may be materially
misleading is called
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Information
risk
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When
auditing merchandise inventory at year-end, the auditor performs audit
procedures to ensure that all goods purchased before year-end are received
before the physical inventory count. This audit procedure provides assurance
about the
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Cutoff
management assertion
|
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When
auditing merchandise inventory at year-end, the auditor performs audit
procedures to obtain evidence that no goods held on consignment are included in
the client’s ending inventory balance. This audit procedure provides assurance
about the
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Rights
and obligation management assertion
|
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When
an auditor reviews additions to the equipment (fixed asset) account to make
sure that repair and maintenance expenses are not understated, she wants to
obtain evidence as to management’s assertion regarding
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Existence
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