Armenia Auditor Qualification Exam flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

IFRS 15 revenue recognition

Five-step model: identify contract, identify performance obligations, determine transaction price, allocate price, recognize revenue when control transfers.

IAS 36 impairment loss

Recognized when carrying amount exceeds recoverable amount (higher of fair value less costs of disposal and value in use).

IAS 2 inventory measurement

Measured at lower of cost and net realizable value; cost includes purchase, conversion, and other costs to bring inventory to present location and condition.

IFRS 9 classification

Financial assets classified as amortized cost, FVOCI, or FVTPL based on business model and SPPI criteria.

IAS 37 provision recognition

Recognize when present obligation from past event, probable outflow of resources, and reliable estimate; measure at best estimate.

ISA 200 reasonable assurance

Auditor obtains reasonable assurance that financial statements are free from material misstatement, whether due to fraud or error.

ISA 315 risk assessment

Procedures to identify and assess risks of material misstatement at financial statement and assertion levels, including understanding entity and internal control.

ISA 700 auditor's opinion

Auditor expresses opinion on whether financial statements are prepared, in all material respects, in accordance with applicable financial reporting framework.

ISA 701 key audit matters

Matters selected from those communicated with those charged with governance that are of most significance in the audit; required for listed entities.

ISA 570 going concern

Auditor evaluates management's assessment of ability to continue as going concern for at least 12 months from financial statement date.

ISA 500 audit evidence

Evidence must be sufficient (quantity) and appropriate (relevance and reliability); external evidence generally more reliable than internal.

ISA 505 external confirmations

Auditor maintains control over confirmation requests and responses; positive confirmations request response in all cases.

ISA 530 audit sampling

Application of audit procedures to less than 100% of items to obtain basis for conclusions; sampling risk and non-sampling risk considered.

ISA 580 written representations

Written statements from management confirming responsibilities and completeness of information; dated near auditor's report date.

Audit risk model

Audit risk = Inherent risk × Control risk × Detection risk; detection risk inversely related to inherent and control risk.

COSO internal control

Five components: control environment, risk assessment, control activities, information and communication, monitoring activities.

ISA 240 fraud risk

Auditor must identify and assess risks of material misstatement due to fraud; required procedures include testing journal entries and reviewing estimates for bias.

Armenian VAT standard rate

Standard VAT rate is 20%; registration threshold generally AMD 115 million annual turnover (verify current law).

Armenian profit tax rate

Corporate profit tax standard rate is 18% (special regimes may apply; verify current legislation).

Armenian tax audit limitation

Statute of limitations for tax audits and assessments is generally 3 years from end of tax period (exceptions may apply).

Armenian LLC liability

Members' liability limited to contributions; LLC is most common commercial legal form in Armenia.

Armenian contract formation

Contract concluded when acceptance reaches offeror; offer and acceptance are essential elements.

Armenian general limitation period

General statute of limitations is 3 years; special periods may apply for certain claims.

Net present value (NPV)

Sum of present values of cash flows minus initial investment; accept project if NPV > 0.

WACC formula

Weighted average cost of capital = (E/V)×Re + (D/V)×Rd×(1−Tc); used as discount rate for projects of average risk.

CAPM formula

Required return = risk-free rate + beta × (market return − risk-free rate); used to estimate cost of equity.

Break-even point

Fixed costs divided by contribution margin per unit (price minus variable cost per unit); sales level where profit is zero.

Activity-based costing

Allocates overhead based on activities and cost drivers; more accurate for diverse product lines than traditional volume-based costing.

Contribution margin

Sales minus variable costs; contribution margin ratio = contribution margin divided by sales.

IESBA fundamental principles

Integrity, objectivity, professional competence and due care, confidentiality, professional behavior.

Independence threats

Self-interest, self-review, advocacy, familiarity, intimidation; apply safeguards or decline engagement if threats cannot be eliminated.

Armenian auditor licensing

Auditors must pass qualification exam and obtain license/certificate from authorized body; firms must be licensed.