Financial Statement Audits Flashcards
Generally Accepted Auditing Standards (GAAS)
the Statement of Auditing Standards issued by the Auditing Standards Board
General Standards
(T) Training
(I) Independence
(D) Due Care- “critically review” the judgement exercised at every level of supervision
Field Work Standards
(P) Planning and Supervision
(I) Internal Control
(E) Evidence
Reporting Standards
(G) GAAP
(C) Consistency
(D) Disclosure
(O) Opinion
SASs
Statements on Auditing Standards
Interpretive Publications (4)
appendices, interpretations, guidance, and statements
1) appendices to SASs
2) auditing interpretations of SASs
3) auditing guidance included in AICPA Audit and Accounting Guides
4) AICPA Auditing Statements of Position
Presumptively Mandatory Requirement
“should”
Purpose of Quality Control
provide reasonable assurance that the firm complies with professional standards and legal requirements and issues appropriate reports
How do you know whether to accept/decline a client relationship?
1) integrity/reputation with management
2) whether CPA has the competence and resources to perform the engagement
3) whether CPA can comply with legal/ethical requirements
Nature/extent of Quality Control depend on what?
- size
- degree of operating autonomy allowed
- nature of the practice
- organization
- cost-benefit relationships
Factors considered in planning an audit engagement’s personnel
- engagement size and complexity
- personnel availability
- special expertise required
- timing of the work, continuity and periodic rotation of personnel
- opportunities for on-the-job training
Auditors Responsiblity
- GAAS
- opinion
Attestation engagement
-issue an examination, a review, or an agreed-upon procedures report on subject matter or an assertion about subject matter that is the responsibility of another party
