notes

Question 1

One notable difference between issuer and nonissuer audit reports is that issuer reports do not include sections exclusively dedicated to listing the responsibilities of management or the auditor

Answer 1

I/C over payroll is well designed, they will initially assess control risk as low and proceed to test their operating effectiveness. If those tests indicate that I/C is effective, the auditors will likely increase their reliance on controls and decreasesubstantive testing. However, if the tests indicate that the I/C is not effective, the auditors will assess a higher CR, not rely on controls, and increase substantive testing.

Question 2

One notable difference between issuer and nonissuer audit reports is that issuer reports do not include sections exclusively dedicated to listing the responsibilities of management or the auditor

Answer 2

I/C over payroll is well designed, they will initially assess control risk as low and proceed to test their operating effectiveness. If those tests indicate that I/C is effective, the auditors will likely increase their reliance on controls and decreasesubstantive testing. However, if the tests indicate that the I/C is not effective, the auditors will assess a higher CR, not rely on controls, and increase substantive testing.

Question 3

The AICPA’s Code of Professional Conduct sets forth guiding principles for members. The Code emphasizes integrity, independence, and a professional’s responsibility to the public, to clients, and to colleagues. It is intended to guide members in the performance of their professional responsibilities.
The Code addresses the quality of all members’ performance (both auditors and nonauditors). The Due Care section encourages each member to achieve a level of competence that ensures quality services. The Scope and Nature of Work section addresses an accounting firm’s internal quality control procedure as a safeguard to ensure quality. GAAS and PCAOB provide guidance regarding which procedures should be used to gather evidence on which to base an audit opinion.
Things to remember:
The AICPA’s Code of Profession Conduct sets forth quality control standards as safeguards to ensure quality auditor performance. GAAS and the PCAOB provide guidance for gathering sufficient appropriate evidence on which to base an audit opinion.

Answer 3

1 Members in public practice
2 Members in business
3 Other members

Independence
1 For attest services
No
No

Integrity and objectivity
1 Always
Always
Always

Due care
Always
Always
Always

Question 4

Independence

Answer 4

An objective mindset, without actual or perceived conflicts of interest, that an auditor adopts conducting assurance services for the client.

Question 5

Independence

Answer 5

An objective mindset, without actual or perceived conflicts of interest, that an auditor adopts conducting assurance services for the client.

Question 6

annual