IAA-2202. Theory ON Auditing AND Attestation Services PDF

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IAA-TAAS 22- The nature, timing, and extent of an audit firm’s quality control policies and procedures depend on The CPA firms size The nature of the CPA Firm’s Practice Appropriate Cost-Benefit Consideration Yes Yes Yes Which of the following statement would least likely appear in an auditor’s en...

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IAA-TAAS 22-02  The nature, timing, and extent of an audit firm’s quality control policies and procedures depend on The CPA firms size The nature of the CPA Firm’s Practice Consideration

Yes

Yes

Appropriate

Cost-Benefit

Yes

 Which of the following statement would least likely appear in an auditor’s engagement letter? After performing our preliminary analytical procedures, we will discuss with you the other procedures we consider necessary to complete the engagement.  An auditor who, before the completion of the engagement, is requested to change the engagement to one which provides a lower level of assurance, should Not agree to a change of engagement where there is no reasonable justification for doing so.  The audit work performed by each assistant should be reviewed to determine whether it was adequately performed and to evaluate whether the Results are consistent with the conclusions to be presented in the auditor’s report.  An auditor’s document includes the following: “We will conduct our audit in accordance with Philippine Standards on Auditing. Those standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.”The above passage is most-likely from a/an Engagement letter  A firm should establish and maintain a system of quality control to provide it with reasonable assurance that: I. The firm and its personnel comply with professional standards and applicable legal and regulatory requirements. II. Reports issued by the firm or engagement partners are appropriate in the circumstances. Both II and II  The auditor may accept or continue an audit engagement only when the basis upon which it is to be performed has been agreed, through I. Establishing whether the preconditions for an audit are present. II. Confirm that there is a common understanding between the auditor and management and, where appropriate, those charged with governance of the terms of the audit engagement. Both I and II  A firm’s system of quality control should ordinarily provide for the maintenance of Documentation to demonstrate compliance with regulatory requirement.  The implementation of quality control procedures that are applicable to the individual audit engagement is the responsibility of the Engagement team  The engagement partner should take responsibility for the direction, supervision, and performance of the audit engagement in compliance with professional standards and regulatory and legal requirements, and for the auditor’s report that is issued to be appropriate in the circumstances. Supervision includes the following, except Informing the members of the engagement team of their responsibilities.

 PSA 220 requires the engagement partner to consider whether members of the engagement team have complied with the ethical requirements relating to audit engagements. The code of Ethics establishes the fundamental principles of professional ethics, which include I. Integrity II. Objectivity III. Professional competence and due care IV. Confidentiality V. Professional behavior I,II,III,IV, and V  The engagement letter documents and confirms the I. Auditor’s acceptance of the appointment II. Objective and scope of the audit III. Extent of the auditor’s responsibilities to the client IV. Form of any reports I, II, III, & IV  Who should take responsibility for the overall quality on each audit engagement? Engagement partner  Which of the following are elements of CPA firm’s quality control that should be considered in establishing its quality control policies and procedures? Ethical Requirements Yes

Human Resources Yes

Engagement Performance Yes

 The following statements relate to the engagement partner’s responsibility to conduct timely reviews of the audit documentation to be satisfied that sufficient appropriate evidence has been obtained to support the conclusions reached and for the auditor’s report to be issued. Which is false? The engagement partner should review all audit documentation.  For audits of financial statements of listed entities, the engagement partner should All of the above  As defined in PSQC 1,__________ is a process comprising an ongoing consideration and evaluation of the firm’s system of quality control, including a periodic inspection of a selection of completed engagements, designed to provide the firm with reasonable assurance that its system of quality control is operating effectively. Monitoring  Which element of a system of quality control is addressed by the establishment of policies and procedures designed to provide the firm with reasonable assurance that it has sufficient personnel with the competence, capabilities, and commitment to ethical principles? Human resources  For audits of financial statements of listed entities, the engagement partner should not issue the auditor’s report until the completion of the Engagement quality control review  In pursuing a firm’s quality control objectives, a firm should adopt policies and procedures to enable it to identify and evaluate circumstances and relationships that create threats to independence, and to take appropriate action to eliminate those threats or reduce them to an acceptable level by applying safeguards, or, if considered appropriate, to withdraw from the engagement. Which quality control element would this be most likely to satisfy? Ethical requirements...