9/2 Class Flashcards
Solutions for homework
Ch 1 3 2 2 3 2 3 4 2 1
Generally Accepted Auditing Standards (GAAS)
Framework
GAAS General Standards ON THE TEST
- Audit must be performed by a competent individual(Adequate technical training and proficiency)
- It must be independent(independence in mental attitude)
- due professional care must be exercised(Due professional care)
Standards of Field Work
- The work is to be adequately planned and assistants, if any, are to be properly supervised(Adequately planned and properly supervised)
- sufficient understanding of internal controls(sufficient understanding of entity & environment, including internal controls)
- sufficient appropriate evidence must be found to base an opinion off of(sufficient appropriate evidence)
Standards of Reporting
- The report shall state whether the financial statements are presented in accordance with GAAP
- Identify circumstances in which such principles have not been consistently followed for the current period in relation to the prior period(principles applied consistently)
- info disclosures in the financial statements are to be regarded as reasonably adequate(informative disclosures)
- (expression of opinion-as appropriate)
For private companies AICPA GAAS acronym
Training & Proficiency
Independence in mental attitude
P Due Professional Care
Plan Work and properly supervise
I Understanding entity environment Internal Control
Third std of field work, sufficient appropriate evidence
Opinion about whether fs are GAAP
Verify that GAAP is consistently applied
Evaluate disclosures
Report with opinion or reasons for why it can’t be stated
Public Company Accounting Oversight Board (PCAOB) Auditing Standards
Adopted GAAS initially
currently 17 PCAOB standards
public companies must be audited in accordance with PCAOB auditing
International Standards on Auditing
auditing standards for international companies
SAS Statement on Auditing Standards
minimum standard for all audit engagements
gets an AUC number as well
auditors responsibility for detecting mistatements
F/S presented in accordance with GAAP
Free of material misstatements
responsible to detect various types of mistatements
materiality
sufficiently important to influence the decision made by reasonable users of financial statements
GAAP
authoritative body FASB GASB SEC IASB substance over form reasonable range of limits
Quality Control in CPA firms
SAS 25 six elements of quality control: Leadership Responsibilities Relevant ethical requirements acceptance & continuance of clients & engagements engagement teams engagement performance monitoring
Peer Review
mandatory for AICPA
applicable to private audits
PCAOB Reviews
mandatory for PCAOB registered firms, every three years under 100 and every year otherwise