Auditing

What does AICPA stand for

American Institute of Certified Public Accountant

What does PCAOB stand for

Public Company Accounting Oversight Board

What is Adverse Interest

Client Litigation against CPA

What is Advocacy Threat

CPA endorses a client product

What is Familiarity

CPA’s close friend employed by client

What is management participation

CPA authorizes a client transaction

What is Self-Interest

CPA has financial interest in client

What is Self-Review

CPA makes accounting decisions for clients

What is Undue Influence

CPA and firm threatened with dismissal from an engagement

What is Independence

Independence of mind and appearance

What is Integrity

Being honest and candid

What is Objectivity

Maintaining an impartial state of mind and remaining free from conflicts

What are general standards?

The standards that the CPA has to follow

What is Compliance with Standards?

A rule requiring them to do everything in accordance with the PCAOB

What is Accounting Principles

A rule that a member can not express an opinion that financial statements conform to GAAP

What are Contingent Fees

Fees that are dependent on a specific outcome

What are Acts Discreditable

A rule prohibiting any act that brings shame or discredit to the accounting profession

What are Advertising and Other Forms of Solicitation

Prohibits advertising that is false or misleading

What are commission and referral fees

Prohibits a CPA from receiving a commission for recommending a product or service to an audit client

What is Form of Organization and Name

Regulates the types of legal entities that a CPA can practice through

What is an auditing reporting

Providing an independent and expert opinion on the fairness of financial statements

What is included in an opinion

Balance sheet, income statement, cash flow statement, and retained earnings statement

Who is an unmodified report addressed to

A report that is addressed to company, shareholders, audit committee, and Board of Directors

What are the sections of an unmodified report

Opinion, Basis for Opinion, and Key Auditing Matters

What is an unqualified report

It is addressed to shareholders and board of directors. It has a basis of opinion and critical auditing matters

What is an unmodified opinion

Auditors obtain sufficient appropriate audit evidence the financial statements aren’t misstated (Immaterial was this)

What is a Group Auditor

A firm that is this should have audited important components, risks of misstatements, and should have the ability to supervise audit

What are 4 types of Opinions

Qualified, Unmodified, Adverse, and Disclaimer of Opinion

What is a Qualified Opinion

States that the financial statements are presented fairly in conformity with GAAP (material is a part of this)

What is an Adverse Opinion

States that the financial statements are not presented fairly

What is a Disclaimer of Opinion

States that due to significant scope limitation, the auditor has no opinion

What is scope limitation

When auditors are limited by the client in some way, for instance, telling them they can’t speak to these certain people