ACC 450 Final Exam Study Guide

ACC 450 Final Exam Study Guide - ACC 450 Final Exam Study...

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ACC 450 Final Exam Study Guide Potential Multiple Choice and Short Answer Questions The Audit Profession (Chapters 1-5) 1. Types of assurance services: a. Assurance Services – an independent professional service that improves the quality of information for decision makers. These services can be done by CPA’s or by a variety of other professionals. (List of other services on Page 11, Table 1-1). b. Attestation Services – Are a part of assurance services. It is a type of assurance service in which the CPA firm issues a report about the reliability of an assertion that is made by another party. 5 Categories: Audit of historical financial statements, Audit of internal control over financial reporting, Review of historical financial statements, Attestation services on information technology, and Other attestation services that may be applied to a broad range of subject matter. i. Internal Control over Financial Reporting, Attestation Services on Information Technology and Other Attestation Services, Audits, and Reviews. c. Non-Assurance Services – Accounting and bookkeeping services, tax services, and management consulting services. The primary purpose of a management consulting engagement is to generate a recommendation to management. 2. Responsibility to detect fraud, errors and illegal acts a. Errors & Fraud - The auditor must obtain reasonable assurance about whether the statements are free of material misstatements. The difficulty of detection does not change the auditor’s responsibility to properly plan and perform the audit to detect material misstatements, whether caused by error or fraud. b. 3 Levels of Responsibility: i. Evidence Accumulation when there is no reason to believe indirect-effect illegal acts exist ii. Evidence Accumulation and other actions when there is reason to believe direct- or indirect-effect illegal acts may exist iii. Actions when the auditor knows of an illegal act 3. Professional responsibilities 4. AICPA Independence requirements a. Covered Members – someone in a position to influence an attest engagement. i. Individuals on the attest engagement team ii. Individuals who supervise or evaluate the engagement partner iii. A partner or manager who provides nonattest services to the client iv. A partner in the office of the partner responsible for the attest engagement v. The firm and its employee benefit plans vi. An entity that can be controlled by any of the covered members listed above or by two or more of the covered individuals or entities operating together 5. Role of PCAOB and AICPA a. PCAOB – overseen by the SEC. Provides oversight for auditors of public companies, establishes auditing and quality control standards for public company audits, and performs inspections of the quality controls at audit firms performing those audits. It conducts inspections of registered accounting firms to assess their compliance with the rules of the PCAOB and SEC, professional standards, and each firm’s own quality control policies. b.
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This note was uploaded on 02/07/2012 for the course ACC 450 taught by Professor Giles during the Fall '08 term at N.C. State.

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ACC 450 Final Exam Study Guide - ACC 450 Final Exam Study...

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