Flashcards
Week 1 - Introduction to Audit
Flashcards do conjunto (26)
- 1What is an assurance engagementWhen an assurance practitioner expresses a conclusion designed to enhance the confidence of intended users other than the responsible party (resp for preparing the reports) about the outcome of the evaluation or measurement of a subject matter against critera
- 2What are the 6 most common assurance services?Financial report audits
Complience audit
Performance audit
Comprehnsive audit
Internal audit
CSR assurance - 3What are the 3 levels of assurance?Resonable assurance
Limited assurance
No assurance - 4What are the two types of audit opinions?Unmodified (aka unqalified or clean) and modified
- 5What is an unmodified/unqualified opinion?The financial report is true & fair, presents fairly the position of the co and the information complies with AAS & Corporations Act
- 6What is a modified opinion?Modifications that dont affect the auditors opinion
-emphasis of the matter (mofications that affect the auditors opinion)
Qualified opinion
Adverse opinion
Disclaimer of opinion - 7What 5 attributes should finanical reports have and who is responsible for prerparing this information?Relevent, reliable, comparable, understandable and true & fair. The responsibilty lies with those charged with governance to prepare financial statements
- 8What responsibilities do auditors have?Professional skepticism, professional judgement & due care
- 9What is Professional skepticism??Maintaining independece from entity and having a questioning mind to thoroughly investigate the information presented
- 10What is Professional judgement?Use of judgement based on level of expertise, knowledge and training obtained by the auditor
- 11What is due care?Being diligent, applying standards & documenting each stage of the audit process
- 12Who demands audit & assurance services?Investors (current and potential for buy hold & sell decisions), suppliers (to see if the entity can pay them back) and customers (to see if the entity is going concern if they rely on the goods). Also lenders, employees, governments and the general public
- 13Why do people demand audit & assurance services? (4)Remoteness (dont have access themselves)
Complexity (users dont have knowledge to make the decsions)
Competing incentives
Reliablilty (info needs to be reliable) - 14What 3 hypothesis explain the demand for audit/assurance services?Agency theory (seperation between ownership & management, information hypothesis ( users need reliable information to aid in decision making) & insurance hypothesis (to 'insure" against potential losses)
- 15Who are the 8 regulalators in relation to auditFRC, AUASB ISAS, APESB, ASIC, ASX, ALDB & Professional bodies (CPA, ICAA & NIA)
- 16What does the FRC (Financial Reporting Council) do?Overseas the process used for standard setting & monitors and reports on auditor indpependence
- 17What does the AUASB (Auditing & Assurance Standards Board) do?Formulating audit standards and bring in line with international standards. Issues ASRE, ASAE, GD standards & statements
- 18What does the International Auditing & Assurance Board do?Develops international standards on auditing (ISAs). Operates under the International federation of accountants (IFAC)
- 19What does the APESB ( Accounting Professional & Ethical Standards Board) do?Established as an independent body by CPA & ICAA to issue prefessional and ethical standards. APEs are mandatory for members of CPA AU, ICAA & NIA
- 20What does ASIC do?Governing body that administers the ASIC Act and much of the Corporations Act and also plays a role in overseeing the audit function
- 21What does the ASX do?Provides attitional obligations for entities wishing to list on the exchange. Formulated in 1987 after the merging of 6 state based exchanges
- 22What does CALDB (Companies, Auditors & Liqudators Disciplany Board) do?Responds to ASIC & Apra re breaches of the Corp Act or ASIC Act and may suspend/give warnings for undertaking to improve conduct auditors
- 23What are rofessional bodies (CPA, ICAA & NIA)?Include professionals in public practive, imdustry, academia & gov. Requires further study and min work experience perios to join as members
- 24What regulation is concerned with auditingThe Corporations Act & Clerp 9
- 25What is an audit expectation gap?Difference between expecations of asuranceproviders and financial report users usually caused by unrealistc expectations in relation to the auditor providing complete assurance, gauranteeing future viability, complete accuract and the auditor finding all frauds
- 26How can the expectation gap be minimised?Auditors performing duties approratly
Peer Review
Revewing & updating standards
Educating the public
Enganced reporting/explanation of audit processes
Greater attention to the risk of fraud occouring
Informações
- Descrição
- Degree Audit FlashCards sobre Week 1 - Introduction to Audit, criado por Lisa Tatham em 07-03-2016.
- Criado por
- Lisa Tatham
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