an independent auditor must have which of the following?

(a) the person is in a financial reporting oversight role at the issuer audit client 1.1 Making Good Financial Decisions about an Organization, 1.2 Incorporation and the Trading of Capital Shares, 1.3 Using Financial Accounting for Wise Decision Making, 2.1 Creating a Portrait of an Organization That Can Be Used by Decision Makers, 2.3 The Need for Generally Accepted Accounting Principles, 2.4 Four Basic Terms Found in Financial Accounting, 3.1 The Construction of an Income Statement, 3.2 Reported Profitability and the Principle of Conservatism, 3.3 Increasing the Net Assets of a Company, 3.4 Reporting a Balance Sheet and a Statement of Cash Flows, 4.5 The Connection of the Journal and the Ledger, 4.1 The Essential Role of Transaction Analysis, 4.2 The Effects Caused by Common Transactions, 4.3 An Introduction to Double-Entry Bookkeeping, 5.3 Preparing Financial Statements Based on Adjusted Balances, 6.1 The Need for the Securities and Exchange Commission, 6.2 The Role of the Independent Auditor in Financial Reporting, 6.5 The Purpose and Content of an Independent Auditors Report, 7.1 Accounts Receivable and Net Realizable Value, 7.2 Accounting for Uncollectible Accounts, 7.4 Estimating the Amount of Uncollectible Accounts, 7.5 Remeasuring Foreign Currency Balances, 7.6 A Companys Vital SignsAccounts Receivable, 8.1 Determining and Reporting the Cost of Inventory, 8.2 Perpetual and Periodic Inventory Systems, 8.3 The Calculation of Cost of Goods Sold, 8.4 Reporting Inventory at the Lower-of-Cost-or-Market, 9.1 The Necessity of Adopting a Cost Flow Assumption, 9.2 The Selection of a Cost Flow Assumption for Reporting Purposes, 9.4 Merging Periodic and Perpetual Inventory Systems with a Cost Flow Assumption, 9.5 Applying LIFO and Averaging to Determine Reported Inventory Balances, 10.1 The Reporting of Property and Equipment, 10.2 Determining Historical Cost and Depreciation Expense, 10.3 Recording Depreciation Expense for a Partial Year, 10.4 Alternative Depreciation Patterns and the Recording of a Wasting Asset, 10.5 Recording Asset Exchanges and Expenditures That Affect Older Assets, 10.6 Reporting Land Improvements and Impairments in the Value of Property and Equipment, 11.1 Identifying and Accounting for Intangible Assets, 11.2 The Balance Sheet Reporting of Intangible Assets, 11.3 Recognizing Intangible Assets Owned by a Subsidiary, 11.4 Accounting for Research and Development, 11.5 Acquiring an Asset with Future Cash Payments, 12.1 Accounting for Investments in Trading Securities, 12.2 Accounting for Investments in Securities That Are Available for Sale, 12.3 Accounting for Investments by Means of the Equity Method, 12.4 The Reporting of Consolidated Financial Statements, 13.2 Reporting Current Liabilities Such as Gift Cards, 14.5 Issuing and Accounting for Serial Bonds, 14.6 Bonds with Other Than Annual Interest Payments, 15.2 Operating Leases versus Capital Leases, 15.3 Recognition of Deferred Income Taxes, 16.1 Selecting a Legal Form for a Business, 16.3 Issuing and Accounting for Preferred Stock and Treasury Stock, 16.4 The Issuance of Cash and Stock Dividends, 16.5 The Computation of Earnings per Share, 17.1 The Structure of a Statement of Cash Flows, 17.2 Cash Flows from Operating Activities: The Direct Method, 17.3 Cash Flows from Operating Activities: The Indirect Method, 17.4 Cash Flows from Investing and Financing Activities. The auditor must use a risk-based approach to determine which Federal programs are major programs. The ability to exercise sound professional judgment. The term "affiliate of the accounting firm" (or "affiliate of the registered public accounting firm" or "affiliate of the firm") includes the accounting firm's parents; subsidiaries; d. An audit has a benefit only to the owners. (e) Step four. PCAOB-2013-03 (May 2, 2014)], A registered public accounting firm must -, (a) prior to accepting an initial engagement pursuant to the standards of the PCAOB -. Chapter 14: In a Set of Financial Statements, What Information Is Conveyed about Noncurrent Liabilities Such as Bonds? The Securities and Exchange Commission today announced that it adopted final amendments to certain auditor independence requirements in Rule 2-01 of Regulation S-X. An independent auditor must have which of the following? a. This site is using cookies under cookie policy . At the end of this section, students should be able to meet the following objectives: Question: The SEC allows FASB to set U.S. GAAP. Standards of Field Work 1. PDF Generally Accepted Auditing Standards in accordance with Section 103(a)(4) of the Act. The amended rule, effective for audits of financial statements for fiscal years ending on or after December 15, 2024, can be found. This report must describe the scope of testing of internal control and compliance and the results of the tests, and, where applicable, it will refer to the separate schedule of findings and questioned costs described in paragraph (d) of this section. (3) Such additional programs as may be necessary to comply with the percentage of coverage rule discussed in paragraph (f) of this section. Be signed by the individual who performed the audit procedures. (a) General. Rule 3101. You must there are over 200,000 words in our free online dictionary, . (e) Request for a program to be audited as a major program. The Electronic Code of Federal Regulations (eCFR) is a continuously updated online version of the CFR. B. (f) Subrecipients and contractors. PCAOB-2020-01 (January 14, 2021)]. The summary schedule of prior audit findings must report the status of all audit findings included in the prior audit's schedule of findings and questioned costs. If this option is exercised, the auditee becomes responsible for submitting the reporting package directly to any pass-through entities through which it has received a Federal award and to pass-through entities for which the summary schedule of prior audit findings reported the status of any findings related to Federal awards that the pass-through entity provided. C. An auditor's responsibilities for audited financial statements are confined to the expression of the auditor's opinion. (3) Notwithstanding the manner in which audit cognizance is determined, a Federal awarding agency with cognizance for an auditee may reassign cognizance to another Federal awarding agency that provides substantial funding and agrees to be the cognizant agency for audit. the engagement set out in the rules and standards of the PCAOB, but also an obligation to satisfy all other independence criteria applicable to the engagement, including the independence criteria set out in the rules and regulations (6) Provide OMB with the name of a key management single audit liaison who must: (i) Serve as the Federal awarding agency's management point of contact for the single audit process both within and outside the Federal Government. Information about the CPA Exam and state requirements for applying are available at http://www.cpa-exam.org. (b) The auditor's opinion on whether the financial statements were prepared in accordance with GAAP, or a basis of accounting required by state law, and the auditor's in relation to opinion on the schedule of expenditures of Federal awards were unmodified. ng elit. protects the confidentiality of that advisor's tax strategies. A. This web site is designed for the current versions of An independent auditor must have which of the following? Also, when these procurement transactions relate to a major program, the scope of the audit must include determining whether these transactions are in compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. If the auditee does not agree with the audit findings or believes corrective action is not required, then the corrective action plan must include an explanation and specific reasons. (d) Submission to FAC. The designated cognizant agency for audit must be the Federal awarding agency that provides the predominant amount of funding directly (direct funding) (as listed on the Schedule of expenditures of Federal awards, see 200.510(b)) to a non-Federal entity unless OMB designates a specific cognizant agency for audit. The PCAOB was established under the oversight and enforcement authority of the SEC. Official oversight of the rules for this process is in the hands of the Public Company Accounting Oversight Board (PCAOB) if the audited company issues securities to the public and the Auditing Standards Board (ASB) if not. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. Learn more about how Pressbooks supports open publishing practices. Explain the function of an independent audit firm. (4) When internal control over some or all of the compliance requirements for a major program are likely to be ineffective in preventing or detecting noncompliance, the planning and performing of testing described in paragraph (c)(3) of this section are not required for those compliance requirements. Advisory groups, in combination or as sub-groups designated by the Board within one advisory group, will contain individuals with expertise in one or more of the following (d) Federal agency to pay for additional audits. an agreement to commit the firm to a set of fixed conditions in the future. Background and more details are available in the Chapter 9: Why Does a Company Need a Cost Flow Assumption in Reporting Inventory? The ability to exercise sound professional judgment. The Board may, in its discretion, establish ad hoc task forces. For a Type A program to be considered low-risk, it must have been audited as a major program in at least one of the two most recent audit periods (in the most recent audit period in the case of a biennial audit), and, in the most recent audit period, the program must have not had: (i) Internal control deficiencies which were identified as material weaknesses in the auditor's report on internal control for major programs as required under 200.515(c); (ii) A modified opinion on the program in the auditor's report on major programs as required under 200.515(c); or. A transaction is considered This written report by the companys independent auditor is then attached to the financial statements for all to see. (2) Unless restricted by Federal statutes or regulations, the auditee must make copies available for public inspection. In connection with the preparation or issuance of any audit report, a registered public accounting firmand its associated personsshall comply with all applicable auditing standards adopted by the (1) When audit findings were fully corrected, the summary schedule need only list the audit findings and state that corrective action was taken. Its mission is stated as follows: The PCAOB is a private-sector, nonprofit corporation, created by the Sarbanes-Oxley Act of 2002, to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports.3. However, if the auditor does become aware of questioned costs for a Federal program that is not audited as a major program (e.g., as part of audit follow-up or other audit procedures) and the known questioned costs are greater than $25,000, then the auditor must report this as an audit finding. Note: In the rare circumstances in which the auditor believes the objectives of the standard can be met by alternative means, the auditor, as part of documenting the planning and performance of the work, must document the information that demonstrates 2, More than 250,000 words that aren't in our free dictionary, Expanded definitions, etymologies, and usage notes. (3) When the auditee believes the audit findings are no longer valid or do not warrant further action, the reasons for this position must be described in the summary schedule. (c) Pass-through entity. (b) Oversight agency for audit responsibilities. This recalculation of the Type A program is performed after removing the total of all large loan programs. She is using a rsum builder to update and include the certification. When an auditee expends Federal awards under only one Federal program (excluding R&D) and the Federal program's statutes, regulations, or the terms and conditions of the Federal award do not require a financial statement audit of the auditee, the auditee may elect to have a program-specific audit conducted in accordance with 200.507.
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