GAAS and Principles Flashcards
Which of the following underlies the application of generally accepted auditing standards, particularly the standards for obtaining sufficient appropriate audit evidence?
The elements of materiality and audit risk.
The element of internal control over compliance with laws and regulations.
The element of “cooperative evidence.”
The element of absolute assurance.
The elements of materiality and audit risk.
This answer is correct because the elements of materiality and audit risk underlie the application of generally accepted auditing standards.
The independent auditor’s plan for an examination in accordance with generally accepted auditing standards is influenced by the possibility of material misstatements. The auditor will therefore conduct the examination with an attitude of:
Professional skepticism.
Subjective mistrust.
Objective indifference.
Professional responsiveness.
Professional skepticism.
This answer is correct because the auditor should plan and perform the audit with an attitude of professional skepticism, recognizing that the application of auditing procedures may produce evidential matter indicating the possibility of errors or fraud.
Generally accepted auditing standards are
Required procedures to be used to gather evidence to support financial statements.
Policies and procedures designed to provide reasonable assurance that the CPA firm and its personnel comply with professional standards.
Pronouncements issued by the Auditing Standards Board.
Rules acknowledged by the accounting profession because of their universal application.
Pronouncements issued by the Auditing Standards Board.
Generally accepted auditing standards are defined as the Statements on Auditing Standards issued by the Auditing Standards Board.
Which of the following best describes what is meant by the term “generally accepted auditing standards” [GAAS] under the AICPA’s clarified auditing standards?
Rules acknowledged by the accounting profession because of their universal application.
Pronouncements issued by the Auditing Standards Board.
Ten authoritative criteria that are classified as General Standards, Fieldwork Standards, and Reporting Standards.
Procedures to be used to gather evidence to support financial statements.
Pronouncements issued by the Auditing Standards Board.
Under the AICPA’s clarified auditing standards, generally accepted auditing standards refer to the set of authoritative pronouncements known as Statements on Auditing Standards issued by the Auditing Standards Board.
As guidance for measuring the quality of the performance of an auditor, the auditor should refer to
Statements of the Financial
Accounting Standards Board.
Generally accepted auditing standards.
Interpretations of the Statements on Auditing Standards.
Statements on Quality Control Standards.
Generally accepted auditing standards.
This answer is correct because auditors are responsible for compliance with generally accepted auditing standards and comparison of their performance against these standards is appropriate.
According to GAAS, which of the following terms identifies a requirement for audit evidence?
Appropriate.
Adequate.
Reasonable.
Disconfirming.
Appropriate.
GAAS requires the auditor to obtain “sufficient appropriate audit evidence…”
An independent auditor must have which of the following?
A pre-existing and well-informed point of view with respect to the audit.
Technical training that is adequate to meet the requirements of a professional.
A background in many different disciplines.
Experience in taxation that is sufficient to comply with generally accepted auditing standards.
Technical training that is adequate to meet the requirements of a professional.
GAAS requires auditors to have adequate technical training and proficiency in auditing.
The exercise of due professional care requires that an auditor
Examine all available corroborating evidence.
Critically review the judgment exercised at every level of supervision.
Reduce control risk below the maximum.
Attain the proper balance of professional experience and formal education.
Critically review the judgment exercised at every level of supervision.
The exercise of due professional care requires that a critical review of the work completed and the judgments made be performed at every level of supervision.
