Chapter 3 LO 3

Question 1

what is the scope paragraph of public entity?

Answer 1

similar to nonpublic second parartgraph of auditor responsiblities. but indicates audit is designed to provide reasonable assurance that FS fre of material mistatement. notes that auditing done on a test basis

Question 2

section 404 of sarbanes oxley requires what?

Answer 2

the auditor of a public company to report on the effectiveness of internal control over financial reporting

Question 3

what are the piecies of the public audit report

Answer 3

1. Report title 2. audit report address 3 introductory 4. scope 5. opinion 6. signature and address of CPA 7. audit report date

Question 4

what does the intro paragraph of public report contain?

Answer 4

1. indicates audit performs and the fianncial statments audited 2. indcates FSs are the resonsibility of management 3. auditors responsiblity is to express opinion on FSs

Question 5

larger public companies are required by SEC to get auditors report on internal control over financial reporting how often

Answer 5

annually

Question 6

what are the 2 significant audit reporting differences for public companies?

Answer 6

1. The standard unmodified opinion audit report is different. The differences are detailed in Figure 3-3. 2. Auditors of larger public companies must also issue an opinion on internal control over financial reporting

Question 7

what is more common separate reporting or combined reporting of of audit on FS and internal control?

Answer 7

separate

Question 8

the PCAOB standards reer to the standard unmodifed opinion audit report as what?

Answer 8

an unqualified opinion audit report

Question 9

what are the pieces of a report on internal control over financial reporting for public company

Answer 9

1. title- 2. report address 3. intro paragra 4. scope paragr 5. definition- of internal control over financial reporting 6. inherent limitations- of internal control 7. opionion - opinion about effectivenes of internal control is as of the end of most recent fiscal year 8. corss reference paragra- cross reference auditors separate report on FSs

Question 10

PCAOB Auditing Standard 5 requires ?

Answer 10

the audit of internal control to be integrated with the audit of financial statements. but you can issue separate reports

Question 11

which sections are similar for public and nonpublic companies in report (4)

Answer 11

title, address, cpa firm name, audit report date

Question 12

what is the opinion paragraph of public report?

Answer 12

similar to opinion of nonpublic if issues separate report on internal control over financial reporting, a 4th paragraph would foolow opinion paragrap and reference audit report on internal control