Chapter 1 Section 2: Professional Standards

Question 1

What are the four sets of standards?

Answer 1

GAAS - Generally Accepted Auditing Standards
GAGAS - Generally Accepted Gov’t Auditing Standards
PCAOB - Public Company Accounting Oversight Board
ISA - International Standards on Accounting

Question 2

What does the PCAOB oversee?

Answer 2

Issuers (public companies)

Question 3

How do you get to audit an issuer?

Answer 3

Register with the PCAOB

Question 4

What standards do nonissuer auditors comply with?

Issuer?

Answer 4

AICPA Statements on Auditing Standards

PCAOB Auditing Standards

Question 5

What are the two overall objectives of the auditor?

Answer 5

Obtain reasonable assurance

Report on the financial statements

Question 6

What do the ethical requirements say about independence?

Answer 6

You must be independent in both fact and appearance

Question 7

What does NET stand for, and why do we care?

Answer 7

It’s Nature, Extent, and Timing

You have to use professional judgment when making decisions about the NET of audit procedures

Question 8

Who started PCAOB?

Answer 8

SOX