CCA Audit & Assurance Flashcards
6 cards from real CCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CCA Audit & Assurance flashcards as text
What is the purpose of management representations letters in an audit?
Answer: To formally document management's assertions about information provided to auditors and responsibility for the financial statements
A management representation letter documents management's written acknowledgment of its responsibility for financial statements and confirms information provided during the audit.
Under what circumstance would an auditor issue a qualified opinion rather than an adverse opinion?
Answer: When there is a material but not pervasive departure from GAAP
A qualified opinion ('except for') is issued when a misstatement is material but not pervasive; an adverse opinion is issued when misstatements are material AND pervasive.
What does 'professional skepticism' require of an auditor?
Answer: Maintaining a questioning mind and critically assessing audit evidence
Professional skepticism requires auditors to maintain a questioning attitude, critically evaluate evidence, and remain alert to conditions that may indicate misstatement or fraud.
What is a 'going concern' opinion, and when is it issued?
Answer: A modified opinion issued when substantial doubt exists about the entity's ability to continue operating for the next 12 months
A going concern emphasis-of-matter paragraph is added to the audit report when the auditor concludes there is substantial doubt about the entity's ability to continue as a going concern for 12 months.
What is the purpose of a walkthrough in an audit of internal controls?
Answer: To trace a single transaction from initiation through the accounting records to verify understanding of the control process
A walkthrough traces one transaction through the entire process to confirm the auditor's understanding of controls is accurate and that documented controls actually exist.
Which of the following is the best example of a substantive test of transactions?
Answer: Vouching recorded sales invoices to shipping documents and customer orders to verify existence and occurrence
Vouching recorded entries back to source documents is a substantive test that directly tests the existence and occurrence of recorded transactions.
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