Intro to Audit Sampling & GAAP Reporting | Breezy CPA

Discover how an audit firm plans, executes, and reports on a publicly traded company's financial statements and internal controls, ensuring GAAP compliance under SOX.

Learn how audit documentation, or working papers, supports the audit opinion by detailing procedures, evidence, and reviewer roles. Explore current and permanent files, audit programs, reconciliations, and retention periods.

Learn about audit letters, including the management representation letter and letter of inquiry, their timing, required representations, and how missing these letters can affect audit opinions.

Identify related parties and related party transactions by reviewing disclosures, board minutes, and year-end or unusual dealings, then assess specialists' and internal auditors' competence and objectivity while testing management estimates.

Explore how auditors apply audit sampling to internal control testing and substantive testing, compare statistical and nonstatistical methods, and assess sampling risk and misstatement risk.

Explore the five audit opinions: unqualified, unqualified with emphasis of a matter, qualified, adverse, and disclaimer, and how materiality and pervasiveness guide reporting decisions.

Explore the three modified audit reports: qualified, disclaimer, and adverse, and how scope limitations, materiality, and pervasiveness under GAAP and GAS determine auditor opinions.

Learn what a compilation is, how to issue a compilation report under AICPA SARS for non issuers, and why it provides no assurance and relies on management.

Explain how a review engagement provides limited, negative assurance on financial statements that conform with GAAP for issuers and non-issuers, including independence, management inquiries, and analytical procedures.

Compare audits, reviews, and compilations to highlight similarities and differences in purpose, assurance level, and user expectations. Explain how tasks and costs differ, including engagement letters, independence, and analytical procedures.

Explore supplementary information in the annual report, including voluntary and required material, notes and segment data, and how auditors assess consistency and potential impacts on opinions.

Explore special reports, including other comprehensive basis of accounting, reports on specific elements, and agreed-upon procedures, with an explanatory paragraph and restricted use for client and third party.

Explore the spectrum of engagements in audit that cover prospective financial statements, including forecasts and projections, as well as condensed and pro forma statements with audit considerations.

Assess how auditing information technology controls informs audit planning, while applying computer assisted audit techniques such as test data, integrated test facilities, and parallel simulation to verify data integrity.

Explore governmental audits under gas the yellow book, combining gas with gaas, the single audit act, and reporting on financial statements, internal controls, and compliance with laws and regulations.