The client's Chief Executive Officer graduated from the same university as the partner in charge of the accounting firm.Īn auditor on the engagement owns a financial interest in the stock of the client. Inspection of bank statements obtained directly from the client's financial institutionĪnalytical procedures performed by auditors on the client's trial balance C Which of the following would most likely be a violation of the independence requirement found in the responsibilities principle under generally accepted auditing standards?Īn auditor on the engagement has a distant relative who is employed by a vendor that does a significant amount of business with clients. Inspection of prenumbered client shipping documents Inquiries of the client's accounting staff held in private A Which of the following procedures would provide the most reliable audit evidence? It is also important for the auditor to understand the entity and its environment thoroughly, in order to assess the possibility of fraud or error, when it comes to material misstatement.The preparation of an audit plan prior to the beginning of fieldwork is appropriately considered documentation of What do you need to know about auditing standards?Įfficient planning of the work and proper supervision of the assistants must be done by the auditor. These sections now reflect the ASB’s established clarity drafting conventions designed to make the standards easier to read, understand, and apply. The Auditing Standards Board (ASB) has redrafted all of the auditing sections in Codification of Statements on Auditing Standards (contained in AICPA Professional Standards). How are statements on Auditing Standards redrafted? 122 and address other changes necessitated by the Clarity Project. This standard contains amendments that conform SAS Nos. This section does not apply to the financial statement audit component of such engagements. When do compliance audits need to be performed?Ĭompliance audits usually are performed in conjunction with a financial statement audit. They are also followed when it comes to passing a judgment on the work done by an auditor. These determine the quality and the efficiency of the audits done, be it of a private firm or a government entity. The Generally Accepted Auditing Standards (GAAS) are a pre-defined set of criteria to which all the certified public accountants must abide by. What are the generally accepted auditing standards ( GAAS )? All negligent parties are always liable for damages. What is a worrisome consequence under the joint and several liability principle? Each negligent party is liable for the portion of the damages for which it is responsible. What is a worrisome consequence under the joint and several liability principle? There are significant scope limitations on the audit. Under which of the following set of circumstances might the auditors disclaim an opinion? There has been a material change between periods in the method of application of accounting principles. Under which of the following set of circumstances might the auditors disclaim an opinion? What are the three main sets of auditing standards used in professional practice by audit firms? International Standards on Auditing, AICPA Auditing Standards, and PCAOB Auditing Standards. What are the three main sets of auditing standards? The 10 standards in the GAAS are grouped into three categories: general standards, standards of field work, and standards of reporting. The primary reason for issuing an adverse audit opinion is that the client’s financial statements contain a pervasive and material unjustified departure from GAAP. Which of the following is the most likely reason for an auditor to issue an adverse opinion quizlet? Each audit engagement you work on may require you to perform audit work beyond what’s specified in the GAAS in order to appropriately issue an opinion that a set of financial statements is fairly presented. GAAS come in three categories: general standards, standards of fieldwork, and standards of reporting. The auditor must maintain independence in mental attitude in all matters relating to the audit. General Standards The auditor must have adequate technical training and proficiency to perform the audit.
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