You are on page 1of 3

1. What are the differences between Financial Statement Audit and Operational Audit.

Explain and give the examples. A financial statement involves obtaining and evaluating evidence about an entitys presentation of its financial position, result of operation and cash flows for the purpose of expressing and opinion or whether they are presented fairly in conformity with established criteria usually GAAP An operational audit involves obtaining and evaluating evidence about the efficiency and effectiveness of an entitys operating activity in relation to specified objectives 2. Please state & explain briefly auditors opinions. A QUALIFIED OPINIONS, which states that accept for the effects of the matters which the qualification relates the financial statements present fairly, in conformity in GAAP Adverse opinions, which states that the financial statement do not present fairly, in conformity in GAAP Disclaimer of opinion, which states that the auditor doesnt express the opinion on the financial statements 3. What is the difference between accounting and auditing?
Accounting is the process of recording, classifying and summarizing of the business events for the purpose of providing financial information to investors for decision making. Auditing is determining whether recorded information properly to the business events that occurred during the accounting period. Its main duties are observe, valuate and recommend the financial statement and the firm.

4. When performing an audit, who is the audit client? Client nya adalah orang yang membutuhkan jasa audit, kalau di perusahaan terbuka eksternal auditor di butuhkan untuk mengaudit laporan keuangan sautu perusahaan karena laporan kuangan tersebut akan menjadi pertimbangan investor untuk membikin keputusan, kalau hanya di audit oleh internal auditor masih ada kemungkinan untuk terjadi nya manipulation 5. What is the purpose of professional ethics and how are professional ethics imposed? Professional ethics represent a commitment by a profession to ethical principles and rules of conduct. A commitment to ethical behavior is a key element that separates recognized professions from other occupations. They usually represent standards of behavior that are both idealistic and practical. The CPA vision project identified the following five core values associated with the CPA profession Integrity Objectivity Competence Continuing education and lifelong learning Attuned to broad business issues

6. Explain the essence of the six principles in the code

Responsibilities, member shoulds exercise sensitive professional and moral judgements in all their activities Public interest, member should accept the obligation to act in a way that will serve the public interest, honor the public trust, and demonstrate commitment to professional Integrity, member should perform all the professional responsibilities with the highest sense of integrity Objective and independence, member should maintain objectivity and be free of conflict of interest in discharging professional responsibilities Due care, member should observe the professions technical and ethical standards, strive continually to improve competence and the quality of service and discharge professional responsibility to the best of the members ability Scope and nature of service, member in public practice should observe the principle the code of professional conduct in determining the scope and nature of service to be provided

7. What is common law also please explain two classes of parties under common law. Common law is revered to as unwritten law. It is based on judicial, common law is derive from principle based on justice reason and common sense rather than absolute, fix, or inflexible rules, and determine by the social needs by the community. Classes of parties are clients and third parties Clients, a CPA is in a direct contractual with clients. In agreeing to perform service to client, the cpa assume the role of independent contractor. The term privity of contract reverse to the contractual relationship that exist between two or more contract things parties. Third parties maybe define as an individual who is not in privity with the parties to a contract 8. Explain the differences between the 1933 and 1934 Acts. 1 the plaintiff 2 prove of reliance on the false or misleading financial statements 3 the auditors liability for ordinary negligence 9. What is the overall objective of the financial statement audit also please state the six distinct phases
The objective of a financial statement audit is to determine whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation . Phase 1 : perform risk assessment procedures - identify relevant financial statement assertion - understand the entity and its environment - make decision about the materiality - perform analytical procedure - identify the risk that may result in material miss statement - develop preliminary audit strategies - understand the internal control

Phase 2 : assess the risk of material misstatement - relate risk factors to potential misstatement in financial statement - determine the magnitude of potential misstatement - Determine the likelihood of material misstatement - Determine the significant inherent risk Phase 3 : respond assess risk - staffing and supervision - nature of audit tests - timing of audit tests - extent of audit tests - respond to significant inherent risk Phase 4 : perform further audit procedures - further risk assessment procedures - test of controls - substantive test Phase 5 : evaluate evidence - reevaluate risk assessment - determine significant of findings - form and document conclusion Phase 6 : communicate audit findings - the auditors opinion - other required communication - other assurance service finding

10. Briefly explain along with the example about the major steps in evaluating evidence. 1- Reevaluate risk assessment procedure means that the auditor should determine whether the assessment of the risk of material misstatement at the assertion level remain appropriate , for example the magnitude and extent of misstatement that the auditor detects by performing substantive procedure may alter the auditor judgment about the risk assessment 2- Determine the significance of findings means the auditor should evaluate both significance of deviation of prescribed control procedure and the significance of error of fraud discovered during the audit for example if the auditor finds error in the computer program owing to inadequate testing of the program, the auditor needs to determine whether other program are effected by deviation from computer general control procedure. The more pervasive the nature of the deviation from internal control policies, the more the auditor may need to consider significant revision in the audit plan 3- Form and document conclusion