Wiley's CPA Jan 2023 Focus Notes
Auditing and Attestation

Quick reference tools for the 2023 CPA AUD exam

Wiley's CPA Jan 2023 Focus Notes: Auditing and Attestation offer practical and hands-on flashcard-style notes on the Auditing and Attestation section of the Certified Public Accountant (CPA) exam. Perfect for targeted review sessions focused on essential, core concepts covered on AUD, the 2023 Focus Notes include:

• Ethics, Professional Responsibilities, and General Principles
• Assessing Risk and Developing a Planned Response
• Performing Further Procedures and Obtaining Evidence
• Forming Conclusions and Reporting

Designed for motivated CPA candidates sitting for AUD in 2023, Wiley's CPA Jan 2023 Focus Notes: Auditing and Attestation are the proven solution for testing your knowledge in quick study sessions leading up to exam day.

Preface xi

Professional Responsibilities 1

Financial Statements, an Audit, and Audited Financial Statements 1

Code of Professional Conduct 5

Conceptual Frameworks 8

Independence Rule 11

Integrity and Objectivity—Members in Business 20

Responsibilities to Clients 21

Noncompliance with Laws and Regulations (NOCLAR) 22

Other Responsibilities and Practices 23

Quality Control 24

Tax Preparer 25

Standards for Consulting Services 26

GAO—GAGAS Ethical Principles 27

Department of Labor Independence Requirements for Employee Benefit Plans 28

Assessing Risk and Developing a Planned Response 29

Financial Statement Assertions 29

Audit Risk (AR) 30

Materiality 34

Evaluation of Misstatements 36

Consideration of Fraud in a Financial Statement Audit 37

Fraud Risk Factors Overall 39

Assessing Risk of Fraud 45

Effects of Fraud Assessment 46

Fraud-Related Documentation 47

Actions Resulting from Evidence of Fraud 48

Laws and Regulations—Responsibility to Detect and Report Illegal Acts 49

Summary of Assurance Provided by Auditor 51

Audit Planning: Communication with Predecessor Auditor 52

Audit Planning: Engagement Letter 53

Planning Considerations 55

Communication of Certain Information to Those Charged with Governance 60

Understanding Internal Control and Assessing Control Risk 62

Consideration of Internal Control 62

Components of Internal Control 63

Obtaining an Understanding of Internal Control during Risk Assessment 69

Relationship of Control Risk to Tests of Controls, Detection Risk, and Substantive Procedures 77

Further Reducing the Assessed Level of Control Risk 78

Documentation of Internal Control 79

Accounting Cycles 81

Other Considerations 90

Performing Further Procedures and Obtaining Evidence 95

Sufficient Appropriate Audit Evidence 95

Basic Types of Audit Procedures 99

Issues Related to Substantive Testing 109

Audit Documentation 123

Auditing Specific Accounts 127

Using Management Assertions to Develop Audit Programs 127

Test of Balances Approach versus Test of Transactions Approach 128

Auditing Accounts 131

Audit Sampling 157

Sampling Risk 157

Types of Statistical Sampling 161

Attribute Sampling 162

Variables Sampling 166

Probability Proportional to Size (PPS) Sampling 169

Auditing with Technology 173

Responsibilities in an Information Technology Environment 173

Controls in an IT Environment 174

Auditing through the Computer 175

Testing General Control Activities 176

Testing Application Control Activities 178

Auditing with the Computer 180

Audit Reports 181

Audit Reports 181

Standard Report 182

Group Financial Statement Audit Reports 189

Unmodified Opinion with Emphasis-of-Matter Paragraphs 194

Unmodified Opinions with Other-Matter Paragraphs 205

Modified Opinions—Two Circumstances 213

Financial Statements Prepared Using Another Country’s Framework 219

Summary Financial Statements 220

Reviews of Quarterly (Interim) Information 221

Other Types of Reports 222

Reports on Application of Framework Requirements 222

Financial Statements with Special Purpose Frameworks 223

Audits of Single Financial Statements and Specific Elements, Accounts, or Items 225

Reporting on Compliance 226

Service Organization Control (SOC) Reports 227

Governmental Auditing and Compliance Audits 229

Accounting and Review Services 239

Financial Statement Preparation 240

Compilations 243

Reviews 247

Other Compilation and Review Considerations 255

Other Professional Services 259

Reporting on Internal Control in an Integrated Audit 259

PCAOB Reporting on Whether Material Weaknesses Still Exist 267

Employee Benefit Plans 268

Attestation Engagements—General 269

Attestation Standards 270

Financial Forecasts and Projections 272

Pro Forma Financial Information 275

Management Discussion and Analysis 275

Compliance Attestation Engagements 276

Index 277