Term
| What are the Big Four international firms |
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Definition
| Deloitte and TOuche, ERnst and Young, PricewaterhouseCoopers, KPMG |
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Term
| What are the activities of a CPA firm |
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Definition
| accounting and bookeeping services, tax services, and management consulting services |
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Term
| According to the Sarbanes-Oxley Act and SEC, what is a restriction on auditors? |
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Definition
| they can't provide many consulting services to public compnay audit clients |
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Term
| what are the three main factors that influence the organizational structure of all firms |
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Definition
1. the need for independence from clients
2. the importance of a structure to encourage competence
3. the increased litigation risk faced by auditors |
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Term
| What did the Sarbanes-Oxley Act establish |
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Definition
| the public company accounting oversight board (PCAOB) |
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Term
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Definition
| provides oversight for auditors of public companies, established auditing and quality ocontrol standards, and performs inspections of the quality controls at audit firms performing those audits |
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Term
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Definition
| assist in providing investors with reliable information upon which to make investment decisions |
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Term
| What are some form required by the SEC for CPA's to know about |
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Definition
Form S-1
FOrm 8-K
Form 10-K
From 10-Q |
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Term
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Definition
| must be completed when a company plans to issue new securities to the public |
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Term
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Definition
| to report significant events that are of interest to public investors |
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Term
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Definition
| Must be filed with 60-90 days after the end of the fiscal year...contains extensive detailed financial info including audited f/s |
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Term
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Definition
| Sets professional requirements for CPAs, conducts research, and publishes materials on many different subject related to accounting, auditing, attestation, and assurance services, management consulting services , and taxes |
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Term
| The four major areas in which the AICPA has authority to set standards and make rules are as follows: |
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Definition
1. Auditing Standards (SASs)
2. Compilation and review standards
3. Other attestation standards
4. Code of professional conduct |
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Term
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Definition
| International Standards on Auditing which is issued by the IAASB of the IFAC |
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Term
| What are auditing standards for private companies and other entities established by and what are they called? |
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Definition
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Term
| Describe the relation of U.S. and International Auditing Standards |
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Definition
• International Standards on Auditing: applicable to entities outside the U.S.
• GAAS: private entities in the US
• PCAOB Auditing Standards: applicable to U.S. Public Companies and other SEC registrants |
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Term
| What are the 3 categories of GAAS? |
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Definition
• General Standards
• Standards of Field Work
• Reporting Standards |
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Term
| What are the 3 GAAS that are considered “general standards” |
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Definition
• Adequate training and proficiency
• Independence in mental attitude
• Due professional care |
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Term
| What are the 3 GAAS under field work |
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Definition
• Proper planning and supervision
• Sufficient understanding of the entity, its environment, and its internal control
• Sufficient appropriate evidence |
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Term
| What are the GAAS under reporting standards |
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Definition
| • Require auditor to prepare a report on the f/s taken as a whole, including disclosures, whether in accordance with GAAP |
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Term
| The 10 GAAS are too general, so auditors turn to what for more specific guidance |
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Definition
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Term
| Under the AICPA Code of Professional Conduct what kind of literature is required to be followed? |
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Definition
| Authoritative literature- GAAS, and SASs |
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Term
| AU numbers indicate classifications of SASs. What are the numbers and what do they represent? |
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Definition
2- general standards
3- field work standards
4, 5, 6- reporting standards |
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Term
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Definition
| Comprises themethods used to ensure that the firm meets its professional responsibilities to the clients and other |
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Term
| What is the difference between quality controls and GAAS? |
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Definition
Quality controls- est for the entire CPA Firm
GAAS- individual engagements |
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Term
| What are the 6 Elements of Quality Control |
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Definition
Leadership responsibilities, releveant ethical requirements, acceptance and continuation of clients and engagements, human resources, engagement performance
Monitoring |
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Term
| What is peer review? And what is it’s purpose |
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Definition
| Review, by CPAs, of a CPA firm’s compliance with its quality control system. Purpose is to determine whether the firm has developed adequate quality control policies and procedures and follows them in practice |
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