which is most likely to result in direct misstatement of a financial statement accou 621705
The auditor performs audit procedures to detect material misstatements in the account balance.
Which is least likely to misstate financial statement amounts?
The CPA must understand the business issues of the company and industry.
Think about control deficiencies, significant deficiencies, and material weaknesses.
What is an indirect financial interest?
Which control gives the auditor the best idea about the daily operation of the company?
Which area does the auditor have the most control over?
Segregate recordkeeping from authorization.
Which control helps the client maintain accountability for the cash payments?
Obsolete or slow moving inventory may never be sold and so the amount of inventory presented on the balance sheet may be overstated.
The client has primary responsibility for the fair presentation of the financial statements.
Partner rotation helps assure independence.
A requirement for any engagement is for the auditor to understand the environment they are working in.
Which fee is contingent?
A review engagement provides only limited assurance.
Think carefully about the indicators provided by the PCAOB.
Mentally “write” an emphasis-of-matter paragraph and consider whether it is likely that these items would be required.
The standard audit report should give the reader a clear understanding about responsibilities.
The auditor wants to determine a deviation rate for the sample.
Which technique places the simulated files into the midst of live transactions?
Documentation should be as accurate as possible.
One of these is intended to get the audit team “up to speed” in the area.
Which procedure may not be practical in some situations?
Consider a reply that will provide resources to the company.
Client’s are able to change accounting principles.
Scope limitations may result in two types of opinion—only one is listed.
Which is false, misleading, or deceptive?
For both types of association a CPA attempts to avoid misunderstandings.
Scope limitation reports are not allowed.
Which is most likely to result in direct misstatement of a financial statement account balance?