International Auditing

Question 1

Who created the International Auditing Standards?

Answer 1

The International Auditing Standards are created by the International Auditing and Assurance Standards Board (IAASB), a member of the International Federation of Accountants (IFAC).

Question 2

For whom were IAASB International Auditing Standards created?

Answer 2

IAASB standards are for countries that don’t have their own standards. They help set the tone for the rest of the members who do have their own standards (AICPA).

IAASB doesn’t override member standards.

Question 3

IAASB standards are based on a risk assessment approach.

Answer 3

IAASB standards are based on a risk assessment approach.

Question 4

How do IAASB audit standards compare to US audit standards?

Answer 4

• No Internal Control audits
• No referencing another audit firm
• Less detailed documentation
• Requires obtain written fraud assessment
• Requires location of auditor’s home office

Question 5

What are International Ethical Standards?

Answer 5

International Ethical Standards are standards set by International Ethics Standards Board for Accountants (IESBA).

It is the Code of Ethics for professional accountants, similar to AICPA Code of Professional Conduct.

Question 6

Which groups are covered under the three sections of the International Ethical Standards?

Answer 6

A) Covers all accountants

B) Covers public accountants

C) Covers accountants in a business environment

Question 7

What are the requirements for all accountants under the International Ethical Standards?

Answer 7

• Accountants should have Integrity.
• Accountants should be Objective.
• Accountants should have Competence.
• Accountants should exercise Due Care.
• Accountants should maintain Confidentiality.
• Accountants should act Professionally.

Question 8

What questions should public accountants pose to themselves under the International Ethical Standards?

Answer 8

• What are the threats/safeguards?
• Does this new client threaten our ethics?
• What are the conflicts of interest?
• What are the threats/safeguards for offering a second
  opinion?
• What are the threats/safeguards for receiving
  commissions or contingent fees?
• Is our marketing truthful?
• What are the threats/safeguards for receiving client
  gifts?
• What are the threats/safeguards to objectivity?