A1 Basics

private

nonissuers

nonissuers regulated by

AICPA using SAS (statements on auditing standards)

nonissuers clean report

unmodified

public

issuers

issuers regulated by

PCAOB AS (auditing standards)

issuers clean report

unqualified

financial statement issue material but not pervasive

qualified opinion (except for)

audit scope issue material but not pervasive.

qualified opinion.

financial statement issue material and pervasive

adverse opinion (do not present fairly)

audit scope issue material and pervasive

disclaimer of opinion (we do not express an opinion)

management responsibilities in an audit

1) preparation and fair presentation of financial statements

2) design, implementation, and maintenance of internal controls

3) providing auditor with access to information and personnel

auditor responsibilities

1) maintaining professional skepticism

2) complying with ethical requirements

3) exercising professional judgement

4) obtaining sufficient appropriate audit evidence

5) complying with GAAS

nonissuers - sections of audit report

OBRA

opinion basis for opinion responsibilities of management and auditors responsibilities

issuers sections of audit report

OBC

opinion basis for opinion critical audit matters

what is included in critical audit matters

IPAD

identification

description of principal considerations to determine it was a CAM

determine how CAM was Addressed

reference to relevant financial statements or Disclosures

form AP

PCAOB within 35 days and 10 days if it has a registration statement

how to obtain a reasonable level of assurance

plan the work properly and supervise assistant

determine and apply materiality levels

identify and assess risks of material misstatements

obtain sufficient appropriate audit evidence

client refusal to disclose subsequent events or make adjustments

DAR

disassociate

alert agencies

alert relying parties

when an auditor changes a prior opinion

DORCS

date of previous audit report

opinion previously issued

reason for prior opinion

changes that have occurred

statement that “opinion is different”

objectives of financial statements engagement

obtain reasonable assurance that financial statements are free from material misstatements

report on financial statements and communicate as required by GAAS

internal control over financial reporting (icfr)

express an opinion on the effectiveness of internal controls

obtained reasonable assurance if material weaknesses exist as of date

report modifications - unqualified

without modification add EOM

report modifications - qualified/modified

modify opinion and basis for opinion

report modifications - adverse

modify opinion and basis no KAM

report modifications - disclaimer

modify opinion basis and auditor responsibilities

auditors responsibilities for subsequent events

PRIME

review post balance sheet transactions

review representation letter from management

inquiry of legal counsel, management those charged with governance

minutes review minutes if shareholders directors and other meetings

examine most recent interim financial statements and compare with audited financial statements