Wiley CPAexcel Exam Review 2014 Study Guide, Auditing and Attestation

Module 2: Engagement Planning, Obtaining an Understanding of the Client and Assessing Risks

Overview

This module presents requirements relating to planning, obtaining an understanding of the client, and assessing risks. Generally, multiple-choice questions are used to test the candidate’s knowledge of areas such as

• Audit planning
• Obtaining an understanding of the client
• Auditor responsibility for the detection of misstatements (errors, fraud, and illegal acts)
• Assessing risks, including the components of audit risk

A. Basic Concepts

B. Audit Planning

C. Obtain an Understanding of the Entity and Its Environment

D. Assess the Risks of Material Misstatement and Design Further Audit Procedures

E. Quality Control

Key Terms

Multiple-Choice Questions

Multiple-Choice Answers and Explanations

Simulations

Simulation Solutions

A simulation may require you to examine a situation, evaluate areas of risk related to a company, and to design appropriate audit procedures in response to that situation. The following sections of Statements on Auditing Standards pertain to this module:

AU-C 200	Responsibilities and Functions of the Independent Auditor
210	Relationship between the Auditor’s Appointment and Planning
220	Quality Control for an Engagement Conducted in Accordance with GAAS
240	Consideration of Fraud in a Financial Statement Audit
250	Illegal Acts by Clients
300	Planning and Supervision
314	Substantive Tests prior to the Balance Sheet Date
315	Understanding ...