Chap2 Flashcards
What responsibilities does an auditor assume when auditing financial statements?
An auditor assumes professional responsibilities that require their opinion to be based on an examination conducted in accordance with professional standards.
What risks does an auditor face for failing to comply with professional standards?
Risks include loss of public respect and assessment of legal damages.
What do standards in the accounting profession measure?
Standards measure the quality of performance of individuals and organizations.
What aspects do standards relating to the accounting profession concern?
They concern CPAs’ professional qualities, judgment exercised by CPAs, and CPA firm’s quality control policies and procedures.
How many generally accepted auditing standards (GAAS) are established by the Board of Accountancy?
Ten generally accepted auditing standards (GAAS).
What is the purpose of GAAS?
GAAS establishes the required level of quality for performing financial statement audits.
What must CPAs follow when auditing financial statements?
CPAs must follow the ten GAAS.
What do Philippine Standards on Auditing (PSAs) clarify?
PSAs clarify the meaning of the ten GAAS.
What are auditing procedures?
Auditing procedures are the means used by auditors to attain the quality required by the standards.
What do GAAS represent?
GAAS represent measures of the quality of the auditor’s performance.
How should GAAS be viewed in terms of performance standards?
GAAS should be viewed as a minimum standard of performance that auditors should follow.
What are the three groups of the ten GAAS?
General standards, fieldwork standards, and reporting standards.
