Chapter 2

Question 1

Auditing standards that identify necessary qualifications and characteristics of auditors and guide the conduct of audit examination.

The purpose is to meet the objective of an audit examination

Answer 1

GAAS (Generally Accepted Auditing Standards)

Question 2

Particular and specialized actions that auditors take to obtain evidence in a specific audit engagement

Answer 2

Audit Procedures

Question 3

Quality guides to the audit that apply to all audits

Answer 3

Audit Standards

Question 4

1. Responsibility of audit
2. Performance of audit
3. Reporting result of engagement

Answer 4

The three fundamental principle of GAAS

Question 4

“state of mind”

allows an auditor to form an opinion on entity’s financial statements without being affected by influences that might compromises on opinions

Answer 4

Independence in Fact

Question 5

relates to others perception of auditor’s independence

Answer 5

Independence in apperance

Question 6

Application of relevant training, knowledge, and experience in making informed decisions about appropriate courses of action during the audit engagement

Answer 6

Professional Judgement

Question 7

GAAS audit may not detect all material misstatements and auditors are not “insurer” and “guarantors” regarding the entity’s financial statement

Answer 7

Reasonable Assurance

Question 8

List of audit procedures that auditors need to perform to gather sufficient evidence on which to base their opinion on financial statements

Answer 8

Audit Plan

Question 9

the relative size of an amount, and the impact it makes on the financial statements.

Answer 9

Materiality