Chapter 3 Professional Standards

Question 1

What 4 features are all ASSURANCE engagements governed by?

Answer 1

Ethics
Risk ASsessment
Terms of Engagement
ISQCs

Question 2

In addition to these 4 features what are UK audits governed by?

Answer 2

Companies Act

ISAs

Question 3

What does the IAASB (set up by IFAC) issue:

Answer 3

ISAs (international standards on auditing)
IInternational Standards on Assurance Engagements (ISAEs)
International Statndards on REview Engagements (ISREs)
International Standards on Related Services (ISRSs)
International Standards on Quality Controls (ISQCs)

Question 4

How does the IAASB set standards?

Answer 4

Establishes a sub-committee who look at area
Subcommitee prepare exposure draft for IAASB then IFAC
When approved- revised draft is issued as definitive international standard.

Question 5

What is the function of the FRC?

Answer 5

Supervises accountancy issues in the UK.

Has taken over job of issuing ISAs from Auditing Practices Board (APB)

Question 6

What are the advantages and disdavantages of accounting and auditing standards to auditors and the consequences of such standards being enforceable by statute?

Answer 6

Advantages:
Accounting standards:
Reduce areas of uncertainty/subjectivity