PCAOB Responsibilities, and AS #1, 3, 4

Question 1

pcaob has 5 responsibilities in regards to sarbanes oxley

Answer 1

registration of us public acc firms which audit public companies

pcaob must conduct inspection of registered public acc firms (if audit 100 issuers or more then they need to be inspected annually. anything less is inspected every three years)

pcaob sets auditing standards

enforcement (pcaob brings disciplinary actions of registered firms and individuals)

funding-the pcaob is funded by registration and annual fees of public accounting firms, and annual acc support fee assessed on issuers

Question 2

PCAOB auditing standards no 1

auditors report differences between aicpa and pcaob

Answer 2

Title of the report – Replaced “Independent Auditor’s Report” with “Report of Independent Registered Public Accounting Firm.”

Scope paragraph – Replaced reference to “auditing standards generally accepted in the United States of America” with “the standards of the Public Company Accounting Oversight Board (United States).”

Opinion paragraph – Replaced reference to “accounting principles generally accepted in the United States of America” with “U.S. generally accepted accounting principles.”

Signature – Required firms to add their city and state (or country, as applicable) along with their signature and date of their audit report.

Question 3

PCAOB auditing standards no 3

audit documentation requirements

Answer 3

demonstrate compliance with pcaob standards

support the basis for auditor’s conclusions

agreement of underlying acc records with the financial statements elements

document audit procedures involving inspection of documents

document all significant findings or issues, must be identified in an engagement completion document

Question 4

3 auditor must maintain the audit documentation for ____ years

Answer 4

7
from report release date
(aicpa is 5 years)

Question 5

3 pcaob documentation completion date

Answer 5

final set of documentation no later than 45 days after the report release date (aicpa is 60)

Question 6

3 pcaob after documentation completion date no

Answer 6

documentation can be deleted, but documentation can be added

Question 7

standard #4

not required to report on whether a previously reported material weakness continues to exist so reporting it is

Answer 7

voluntary

Question 8

4 auditor cannot issue a _____ opinion on management statement of fact

Answer 8

qualified