CPA Audit Notes 95 score.xlsx

	A	B	C	D
1	Topic/Description	Pg	Mnemonics	Mnemonics explanations
2	What to include in Audit Report for each CAM identified	A1 29	IPAD	Identify CAM, describe Principal consideration led auditor to determine CAM, how CAM was Addressed in current audit, reference to relevant FS, accounts, and Disclosures
3	If current year audit changes PY Opinion, auditor should include these in Emphasis-of-matter/Other-matter paragraph or Explanatory paragraph	A1 72	DORCS	Date of prior audit report, Opinion type previously issued, Reason for prior opinion, Changes that occurred, Statement that the current year opinion is different from prior year
4	Subsequent events audit program that auditors should do	A1 82	PRIME	Post balance sheet transactions - review post bs transactions for proper cutoff and to better evaluate yr-end balances
5				Representation letter - obtain mgmt rep letter regarding whether events occurred during subsequent period requiring adjustments to or disclosure in FS
6				Inquiry - auditor should inquire client's legal counsel concerning litigation, claims, and assessments. Inquire mgmt and those charged with governance about subsequent ocurring that could affect FS
7				Minutes - review bod minutes during subsequent period
8				Examine - examine latest interim FS and compare them to FS under audit
9	Elements of Quality Control	A2 3	HELP ME	Human resources
10				Engagement/client acceptance and continuance
11				Leadership responsibilities
12				Performance of the engagement
13				Monitoring
14				Ethical requirements
15	6 Main Financial Statement Assertions	A2 31	COVERUP	Completeness - All assets, liabilities, equity interests, and transactions that should have been recorded have been recorded
16				CutOff - Transactions and events have been recorded in the correct accounting period
17				Valuation, Allocation, and Accuracy - All transactions, assets, liabilities, and equity interests are included in the financial statements at proper amounts
18				Existence and Occurrence - Assets, liabilities, and equity interests exist and recorded transactions and events have occurred.
19				Rights and Obiligations - The company holds rights to the assets, and liabilities are the obligations of the company
20				Understandability of Presentation and classification (Presentation and disclosure) - Accounts are described and classified in accordance with generally accepted accounting principles, and financial statement disclosures
21	The components of internal control needed to understand first before an auditor can understand design and implementation of internal control for the planning stage	A2 58	CRIME	Control environment - overall tone of the org
22				Risk assessment - mgmt identification of risk
23				Information and communication systems - means of recording transactions and communicating responsibilities
24				Monitoring - Assessment of internal control performance over time
25				Existing control activities - control policies and procedures
26	Existing Control Activities in a STRONG system	A2 62	PAIDTIPS	Prenumbering of docs
27				Authorization of transactions
28				Independent checks to maintain asset accountability
29				Documentation
30				Timely and appropriate financial performance reviews
31				Information processing controls (Computer-based controls)
32				Physical controls for safeguarding assets
33				Segregation of duties
34	Segregation of duties - functions that shouldn't be combined	A2 63	ARC	Authorization
35				Record keeping
36				Custody of related assets
37	Types of Docs auditor can use to document their understanding of internal control	A2 68	FIND	Flowcharts - depict audit's understanding of internal control, more appropriate for documenting complex structures
38				Internal Control Questionnaire or Checklists
39				Narrative - a written version of a flowchart, more appropriate for documenting less complex structures
40				Documentation from the client, including copies of the entity's procedures manuals and organzation charts
41	Three elements of Further Audit Procedures in response to Assessed RMM	A3 21	NET	Nature of an audit procedure - includes both purpose (test of control & substantive procedures) and its type (inspection, observation, inquiry, confirmation, recalculation, reperformance, or analytical performance). Most primary of NET.
42				Extent of an audit procedure - refers to quantity to be performed (# of observations, sample size to be used)
43				Timing - may be at interim or year-end
44	Hierarchy of audit evidence (Appropriateness of audit evidence - must be reliable and relevant)	A3 41	AEIO	Auditor's direct personal knowledge
45				External evidence (directly to auditor is more reliable)
46				Internal evidence
47				Oral evidence
48	Standard audit procedures used for RA procedures, tests of controls or substantive test	A3 45	C the FIVE CARROT WARS	Confirmation - specific type of inquiry obtaining representation from independent external third parties about account balances and transactions or events (I.e. bank confirmation, customer confirmation AR)
49				Footing, Cross-footing, and Recalculation - footing is adding down vertically, cross-footing is adding horizontally, recalculation is done manually or via automated tools - spreadsheeets or a Generealized Audit Software Package.
50				Inquiry - request info from knowledgeable parties internally/externally. Inquiry of internal personnel not sufficient alone.
51				Vouching - directional testing examining support from FS down to source documents. Objective - gather evidence for possible Overstatement error such as in Sales/Revenues reported (Existence and Occurrence assertions)
52				Examination/Inspection - of records, docs or tangible assets. Generally for Existence assertion. Inlcudes scanning, scrutinizing, and reading.
53				Cutoff review - of year-end transactions, Inventory, Cash, Purchases, Sales, and Accruals.
54				Analytical procedures - evaluation of financial info by studying meaningful relationships among data to highlight unusual fluctuations that could be result of errors, fraud, or overstatements. Comparing CY FS for internal consistency. Scan large, significant, unusual items.
55				Reperformance - independently perform procedures or controls that are part of client's IC
56				Reconciliation - substantiates Existence and Valuation assertions. Comparing financial amounts from two independent sources for agreement.
57				Observation - looks at process or procedure performed by others. Evidence obtained only for that point in time. Auditor's direct personal direct knowledge, but client personnel are aware of auditor observing, so reliability may be not as reliable.
58				Tracing - directional testing examining support from source docs to FS. Objective - gather evidence for possible Understatement error such as omission of liabilities (Completeness assertion)
59				Walk-through - questioning entity's personnel about their understanding of wat is reqd by entity's prescribed procedures and controls at point which important processing procedures occur.
60				Auditing related accounts simultaneouly - LT liabilities and int exp, captial additions to PPE and repairs and maintenance exp, investments, dividends, and int inc
61				Representation letter - at conclusion of fieldwork, obtain rep letter from mgmt
62				Subsequent events review - perform certain procedures during Subsequent Period. Evidence that becomes available after BS date should be evaluated about the valuation of assets and liabilities on BS date.
63	Account balances and disclosures Relevant Assertions Asset bal - Existence, Vouch Liabilities bal - Completeness, Trace	A3 56	CVERUP	Completeness - All assets, liabilities, equity interests, and transactions that should have been recorded have been recorded
64				CutOff - NOT APPLICABLE
65				Valuation, Allocation, and Accuracy - All transactions, assets, liabilities, and equity interests are included in the financial statements at proper amounts
66				Existence and Occurrence - Assets, liabilities, and equity interests exist and recorded transactions and events have occurred.
67				Rights and Obiligations - The company holds rights to the assets, and liabilities are the obligations of the company
68				Understandability of Presentation and classification (Presentation and disclosure) - Accounts are described and classified in accordance with generally accepted accounting principles, and financial statement disclosures
69	Transactions, events, and disclosures Relevant Assertions Revenue transactions - Existence, Vouch Expense transactions - Completeness, Trace	A3 57	COVEUP	Completeness - All assets, liabilities, equity interests, and transactions that should have been recorded have been recorded
70				CutOff - Transactions and events have been recorded in the correct accounting period
71				Valuation, Allocation, and Accuracy - All transactions, assets, liabilities, and equity interests are included in the financial statements at proper amounts
72				Existence and Occurrence - Assets, liabilities, and equity interests exist and recorded transactions and events have occurred.
73				Rights and Obiligations - NOT APPLICABLE
74				Understandability of Presentation and classification (Presentation and disclosure) - Accounts are described and classified in accordance with generally accepted accounting principles, and financial statement disclosures
75	Factors that may indicate Substantial Doubt about the entity's ability to continue as a going concern	A4 51	FINE	Financial difficulties - loan default, dividend arrearages, denial of usual trade credit, debt restructuring, noncompliance w/capital reqmnts, new financing sources, disposal of substantial assets
76				Internal matters - work stoppages, labor difficulties, substantial dependce on a project, significant revision of operations
77				Negative trends - recurrent losses, working capital deficiencies, neg cf, adverse financial ratios
78				External matters - legal, legislation, loss of key franchise/patent/customers/suppliers, natural disaster
79	Common concepts on guided by Attestation standards	A5 34	CAPE CORP	Compliance with all attestation standards. Perform alt procedures if departure.
80				Acceptance and continuance satisfactorily performed for client relationships and attestation engagements
81				Preconditions for an attestation engagement are present, including Practitioner's Independence, Responsible party takes responsibility for underlying subject matter.
82				Engagement doc standards for timeliness, retention, ownership, and confidentiality apply
83				acceptance of a Change in terms of engagement as reasonable
84				using work of Other practitioner is allowed. Perform due dilligence on other's independence, competence, compliance w/ethical req'mts, and adequate performance of work.
85				Responsibility for quality control
86				Professional skepticism and professional judgment maintianed thorughout planning and performance of attestion engagement
87	Preconditions for Agreed-Upon Procedures	A5 45	I AM SURE	Independence of practitioner
88				Agreement btwn practitioner and engaging party regarding procedures, criteria, and materiality.
89				Measurability and Consistency of subject matter
90				Sufficiency of procedures is responsibility of client
91				Use of report can be General or Restricted
92				Responsibility for subject matter is client's
93				Engagements to perform agreed-upon procedures on prospective FS (PFS must include summary of significant assumptions)
94	Review Requirements under SSAR	A6 30	U LIAR CPA	Understanding with client is established
95				Learn/obtain sufficient understanding of client's business
96				Inquiries addressed to appropraite personnel
97				Analytical procedures should be performed
98				Review - Other procedures should be performed
99				Client representation letter obtained from mgmt
100				Professional judgment to evaluate results