Kinh Nghiệm về According to gaas, which of the following terms identifies a requirement for audit evidence? Mới Nhất
Hoàng Gia Vịnh đang tìm kiếm từ khóa According to gaas, which of the following terms identifies a requirement for audit evidence? được Update vào lúc : 2022-08-30 19:22:04 . Với phương châm chia sẻ Mẹo Hướng dẫn trong nội dung bài viết một cách Chi Tiết Mới Nhất. Nếu sau khi tham khảo tài liệu vẫn ko hiểu thì hoàn toàn có thể lại Comments ở cuối bài để Admin lý giải và hướng dẫn lại nha.- School DeVry University, Long Beach
Course Title ACCOUNTING ACCT 591
Type
Test Prep
Nội dung chính- Which of the following statements is correct concerning an auditor's responsibilities regarding financial statements? An auditor may draft an
entity's financial statements based on information from management's accounting system. Which of the following best describes what is meant by the term "generally accepted auditing standards"? The Statements on Auditing
Standards issued by the Auditing Standards Board. The exercise of due professional care requires that an auditor B. Critically review the judgment exercised 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 every level of supervision. Which of the following categories was included in the AICPA's ten historical generally accepted auditing standards? C. Standards of field work.The AICPA's prior generally accepted auditing standards (GAAS) included three categories: General Standards, Standards of Field Work, and the Standards of Reporting. The field work standards addressed how the audit was to be conducted and included planning, supervision, evidence, and understanding of the entity and its environment. To exercise due professional care an auditor should C. Critically review the judgment exercised by those assisting in the audit.The auditor is required by GAAS to exercise due care in the performance of the audit and the preparation of the report. Due care encompasses the employment of reasonable care and diligence as well as critical
review every level of supervision of the work done and the judgment exercised by those assisting in the audit. According to GAAS, which of the following terms identifies a requirement for audit evidence? Appropriate.GAAS requires
the auditor to obtain "sufficient appropriate audit evidence..." The GAAS requirement states that due care is to be exercised in the performance of an audit is ordinarily interpreted to require Critical review of the judgment exercised
every level of supervision.While due care imposes the general responsibility of following the applicable GAAS standards, the professional standards specifically address the need for critical review. Exercising due care is defined as requiring "critical review" of the work performed and the audit judgments made every level of supervision. An independent auditor must have
which of the following? Technical training that is adequate to meet the requirements of a professional.GAAS requires auditors to have adequate technical training and proficiency in auditing. In AICPA professional standards,
the term professional requirements refers to: Unconditional requirements (Yes) Presumptively mandatory requirements (Yes)There are 2 categories of professional standards: (1) unconditional requirements; and (2) presumptively mandatory requirements. In AICPA professional standards, the word should indicates an (a) Presumptively mandatory requirement from which the CPA may depart in rare circumstances.The word should indicates a presumptively mandatory requirement Interpretive publications include all of the following, except for Articles in the AICPA's Journal of Accountancy.Articles in the Journal of Accountancy have no authoritative status, and would be classified as other auditing publications. Which of the following statements is not correct about materiality? An auditor considers materiality for planning purposes in terms of the largest aggregate level of misstatements that could be material to any one of the financial statements.An auditor considers materiality for planning purposes in terms of the
SMALLEST aggregate level of misstatements that could be material to any one of the financial statements. Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality?
The entity's annualized interim financial statements.The auditor's preliminary judgment about materiality is a judgment about the amount of a misstatement in the financial statements under audit, which would be considered material (one that could influence the decision of a reasonable person relying on the financial statements). It is appropriate and likely, therefore, for the auditor to consider the entity's annualized interim financial statements in developing such a judgment. Which of the following statements is correct concerning materiality in a financial statement audit? Materiality levels are generally considered in terms of the smallest aggregate level of misstatement that could be considered material to any one
of the financial statements.The auditor is required to determine materiality for the financial statements as a whole. As a result, the auditor ordinarily considers materiality for planning purposes in terms of the smallest aggregate level of misstatements that could be considered material to any one of the financial statements. An auditor finds several errors in the
financial statements that the client prefers not to correct. The auditor determines that the errors are not material in the aggregate. Which of the following actions by the auditor is most appropriate? Document the errors in the summary of uncorrected errors, and document the conclusion that the errors do not cause the financial statements to be
misstated.The auditor is allowed to "pass" on aggregated errors that are not material. This analysis and conclusion must be documented in the audit documentation. Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality? The entity's financial statements of the prior year.Materiality refers to a cutoff amount for a misstatement over which the financial statements would be unfairly presented. In determining this amount, out of the choices given, the most likely source is the prior year financial statements. The statements would provide the auditor with the most information to use in setting materiality. When planning a sample for a substantive test of details, an auditor should consider tolerable misstatement for the sample. This consideration should Be related to preliminary judgments about materiality levels.When planning a sample for a substantive test of details,
the auditor's consideration of tolerable misstatement for the sample would be related to the preliminary judgment of materiality. The auditor determines the nature, timing, and extent of auditing procedures to be applied in order to obtain reasonable assurance of detecting material misstatements in the financial statements.The preliminary judgment of materiality is the auditor's first estimate of amounts that could be considered to be material. When issuing an unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the Estimate of the total likely misstatement is less than a material amount.In order to issue an unqualified opinion, the auditor must be confident that no
material misstatements exist in the financial statements. While misstatements may exist, in total they must be believed to be less than a material amount. In considering materiality for planning purposes, an auditor believes that misstatements aggregating $10,000 would have a material effect on an entity's income statement, but that misstatements would have to aggregate
$20,000 to materially affect the balance sheet.Ordinarily, it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate $10,000 Materiality should be considered in terms of the smallest aggregate level of misstatements that could be considered material to any one of the financial statements. As
$10,000 is material to the income statement and that amount is smaller than the $20,000 material to the balance sheet, the smaller amount would be used. An auditor's responsibility to express an opinion on the financial statements is
Explicitly represented in the responsibility paragraphs of the auditor's standard report.GAAS require an auditor to express an opinion on the financial statements. That responsibility is EXPLICITLY represented in the Auditor's Responsibility paragraphs of the auditor's standard report which states that the auditor's responsibility is to express an opinion. After field work
audit procedures are completed, a partner of the CPA firm who has not been involved in the audit performs a second or wrap-up working paper review. This second review usually focuses on The fair presentation of the financial statements in conformity with GAAP.The review by a second partner is part of a firm's quality control system. It is performed to
ensure the fair presentation of the financial statements in conformity with GAAP. While this particular step was not specifically discussed in the Study Text, it is a common part of firm quality control systems and thus important to know (as evidenced by its past inclusion in the exam). If your knowledge of this area is a little hazy, consider looking it up in an auditing textbook for more detailed coverage. GAAS require the auditor's report to contain either an expression of opinion regarding the financial statements or an assertion to the effect that an opinion cannot be expressed. The objective of this requirement is to prevent Misinterpretations regarding the degree of responsibility the auditor is assuming.The objective
of the requirement is to prevent misinterpretations regarding the degree of responsibility the auditor is assuming when his name is associated with financial statements. The purpose of establishing quality control policies and procedures for deciding whether to accept or continue a client relationship is to Minimize the likelihood of associating with clients whose management lacks integrity.The AICPA's Quality Control Standards identify 3 focal points in considering acceptance and continuance issues: (1) the integrity and reputation of management and other relevant persons associated with the entity; (2) whether the CPA has the competence and resources to perform the engagement; and (3) whether the CPA can comply with
applicable legal and ethical requirements. Hence, a primary purpose of addressing the acceptance/continuance issues is to avoid association with clients whose management lacks integrity and clients who are otherwise regarded as too risky. An attestation engagement is one in which a CPA is engaged to Issue a written communication expressing a conclusion about the reliability of a written assertion that is the responsibility of another party.An attestation engagement is one in which the practitioner is engaged to issue an examination, a review, or an agreed-upon procedures report on subject matter or an assertion about subject matter that is the responsibility of another party. An entity engaged a CPA to determine whether the client's web sites meet defined criteria for standard business practices and controls over transaction integrity and information protection.In performing this engagement, the CPA should comply with the provisions of Statements on
Standards for Attestation Engagements.The type of engagement described is a WebTrust assurance engagement. It is performed in accordance with the Statements on Standards for Attestation Engagements. The audit work performed by each assistant should be reviewed to determine whether it was adequately performed and to evaluate whether the Results are consistent with the conclusions to be presented in the auditor's report.The audit work performed by each assistant should be reviewed for adequacy and to ensure that it supports the conclusions reached. Which of the following statements would
least likely appear in an auditor's engagement letter? After performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagement.The engagement letter documents the understanding between the auditor and the client regarding the nature and timing of the services to be performed,
expected fees and the basis for billing, the responsibilities of the auditor, the client's responsibilities in preparing for the audit, and the need for other services to be performed. It would not include a statement committing the auditor to discuss the auditing procedures considered necessary. Selection and performance of auditing procedures are a matter of auditor judgment and not subject to disclosure to the client. Generally accepted accounting principles are applicable only to the financial statements of public companies. The auditor's responsibility for an
entity's financial statements is confined to the expression of an opinion on those financial statements. The primary role of the auditor is to provide an impartial assessment of the reliability of management's financial
statements. General-purpose financial statements are representations of management. The AICPA principle dealing with performance includes those matters formerly associated with the Fieldwork Standards of GAAS. The AICPA principle on reporting requires the auditor's report to explicitly refer to "accounting principles generally accepted in the United States of America." The AICPA principle dealing with performance takes the place of what previously had been called Reporting Standards under GAAS. The AICPA principle dealing with responsibilities includes the
characteristics formerly associated with the General Standards of GAAS. The AICPA uses the term GAAS when referring to the 7 principles adopted by the AICPA to provide a framework for understanding an audit. The 7 principles adopted by the AICPA (to provide a framework for understanding an audit) are organized around 4 main themes: purpose/premise; responsibilities; performance; and reporting. The 10 specific standards formerly known as GAAS in the AICPA's auditing standards have been replaced by 11 principles applicable to audits. The 10 specific standards formerly known as GAAS in the AICPA's auditing standards still remain in effect in the PCAOB auditing standards. Auditors must apply articles in the Journal of Accountancy and the AICPA's CPA letter related to their audit engagements. The AICPA's Statements on Auditing Standards collectively are known as generally accepted auditing standards (GAAS). Generally accepted auditing standards are the criteria by which the fairness of
financial statements are evaluated. Identify the topics associated with the three general standards for Generally Accepted Auditing Standards (GAAS), which are still applicable to the PCAOB's auditing standards. A. General Standards -- There are 3 of these ("TID"). They are "personal" in nature as they relate to qualities that the auditor brings to the assignment:1. Training -- "The auditor must have adequate technical training and proficiency to perform the audit."2. Independence -- "The auditor must maintain independence in mental attitude in all
matters relating to the audit."3. Due care -- "The auditor must exercise due professional care in the performance of the audit and the preparation of the report." AICPA replaced these 10 standards with 7 principles in connection with its Clarified Auditing Standards. which is the statement of auditing standards Identify the 4 primary themes associated with the AICPA's 7 principles for audit standard setting.
Purpose/premiseResponsibilitiesPerformanceReportingPRPR Identify the topics associated with the four reporting standards for Generally Accepted Auditing Standards (GAAS), which are still applicable to the PCAOB's auditing standards. GAAPConsistencyDisclosureOpinion.GCDP Identify the topics associated with the three field work standards for Generally Accepted Auditing Standards (GAAS), which are still applicable to the PCAOB's auditing standards. Field Work Standards -- There are 3 of these ("PIE"). They are related to the evidence-gathering activities that form the foundation for the auditor's conclusions.1. Planning and supervision -- "The auditor must adequately plan the work and must properly supervise any assistants."2. Internal control -- "The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the
financial statements whether due to fraud or error, and to design the nature, timing, and extent of further audit procedures."3. Evidence -- "The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit." Identify the topics associated with each
of the AICPA's 7 principles for audit standard setting. PurposePremiseResponsibilitiesReasonable assurancePerformance requirements to achieve reasonable assuranceInherent limitationsReporting In the
U.S.A, who issues auditing standards applicable to audits of governmental entities? U.S. Government Accountability Office (GAO). In the U.S.A, who issues auditing standards applicable to audits of private companies and other
entities known as nonissuers? AICPA's Auditing Standards Board. In the U.S.A, who issues auditing standards applicable to audits of public companies (also known as issuers)? Public Company Accounting Oversight Board (PCAOB). What is meant by Generally Accepted Auditing Standards (GAAS) under the clarified auditing standards? The Statements on Auditing Standards issued by the AICPA's Auditing Standards Board. List some benefits of an audit to a private company (also known as a nonissuer). More favorable cost of capital;Insights
into adequacy of internal controls;Benchmark an entity's performance with other similar entities. Who is primarily responsible for the fairness of an entity's financial statements? Management. The financial statements are
the representation of management. What is the auditor's primary role? To provide an impartial (independent) assessment of the reliability of management's financial statements. Define "Generally Accepted Accounting Principles (GAAP)." The standards by which the quality of the financial statements is judged. "Explanatory
material" in AICPA professional standards refers to descriptive guidance that does not impose a professional requirement. "Unconditional requirements" are identified in AICPA professional standards with the word "should."
Auditors are required to apply all "interpretive publications" applicable to their audits. Which of the following terms identifies the said requirement for audit evidence?What are the requirements for audit evidence obtained?Which of the following is the principles of GAAS audit?What are the three auditing standards that constitute GAAS?
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Which of the following terms identifies a requirement for audit evidence?a. Appropriate.b. Disconfirming.c. Adequate.d.Reasonable.ExplanationChoice "a" is correct. The auditor must obtain sufficient appropriate audit evidence to afford a reasonablebasis for the opinion.Choice "c" is incorrect. Auditing standards do not use the wordadequatein describing the requirementsfor audit evidence; the term issufficient appropriate audit evidence.Choice "d" is incorrect. Auditing standards use the wordreasonableto describe the type of assurancegained by the auditor as the basis for the opinion, and not to describe a specific requirement for auditevidence.
Choice "b" is incorrect. Auditing standards do not use the worddisconfirmingin describing therequirements for audit evidence.Which of the following provides the most authoritative guidance for the auditor of a nonissuer?
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Choices "c" and "d" are incorrect. AICPA audit and accounting guides and SAS interpretations areinterpretive publications that provide guidance regarding how SASs should be applied in specificsituations. They are not as authoritative as SASs.Choice "a" is incorrect. Journal of Accountancy articles have no authoritative status but may be helpful tothe auditor.Which of the following accurately depicts the auditor's responsibility with respect to Statements onAuditing Standards?
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Which of the following statements is correct concerning an auditor's responsibilities regarding financial statements?
An auditor may draft an entity's financial statements based on information from management's accounting system.
Which of the following best describes what is meant by the term "generally accepted auditing standards"?
The Statements on Auditing Standards issued by the Auditing Standards Board.
The exercise of due professional care requires that an auditor
B. Critically review the judgment exercised 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 every level of supervision.
Which of the following categories was included in the AICPA's ten historical generally accepted auditing standards?
C. Standards of field work.The AICPA's prior generally accepted auditing standards (GAAS) included three categories: General Standards, Standards of Field Work, and the Standards of Reporting. The field work standards addressed how the audit was to be conducted and included planning, supervision, evidence, and understanding of the entity and its environment.
To exercise due professional care an auditor should
C. Critically review the judgment exercised by those assisting in the audit.The auditor is required by GAAS to exercise due care in the performance of the audit and the preparation of the report. Due care encompasses the employment of reasonable care and diligence as well as critical review every level of supervision of the work done and the judgment exercised by those assisting in the audit.
According to GAAS, which of the following terms identifies a requirement for audit evidence?
Appropriate.GAAS requires the auditor to obtain "sufficient appropriate audit evidence..."
The GAAS requirement states that due care is to be exercised in the performance of an audit is ordinarily interpreted to require
Critical review of the judgment exercised every level of supervision.While due care imposes the general responsibility of following the applicable GAAS standards, the professional standards specifically address the need for critical review. Exercising due care is defined as requiring "critical review" of the work performed and the audit judgments made every level of supervision.
An independent auditor must have which of the following?
Technical training that is adequate to meet the requirements of a professional.GAAS requires auditors to have adequate technical training and proficiency in auditing.
In AICPA professional standards, the term professional requirements refers to:
Unconditional requirements (Yes) Presumptively mandatory requirements (Yes)There are 2 categories of professional standards: (1) unconditional requirements; and (2) presumptively mandatory requirements.
In AICPA professional standards, the word should indicates an (a)
Presumptively mandatory requirement from which the CPA may depart in rare circumstances.The word should indicates a presumptively mandatory requirement
Interpretive publications include all of the following, except for
Articles in the AICPA's Journal of Accountancy.Articles in the Journal of Accountancy have no authoritative status, and would be classified as other auditing publications.
Which of the following statements is not correct about materiality?
An auditor considers materiality for planning purposes in terms of the largest aggregate level of misstatements that could be material to any one of the financial statements.An auditor considers materiality for planning purposes in terms of the SMALLEST aggregate level of misstatements that could be material to any one of the financial statements.
Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality?
The entity's annualized interim financial statements.The auditor's preliminary judgment about materiality is a judgment about the amount of a misstatement in the financial statements under audit, which would be considered material (one that could influence the decision of a reasonable person relying on the financial statements). It is appropriate and likely, therefore, for the auditor to consider the entity's annualized interim financial statements in developing such a judgment.
Which of the following statements is correct concerning materiality in a financial statement audit?
Materiality levels are generally considered in terms of the smallest aggregate level of misstatement that could be considered material to any one of the financial statements.The auditor is required to determine materiality for the financial statements as a whole. As a result, the auditor ordinarily considers materiality for planning purposes in terms of the smallest aggregate level of misstatements that could be considered material to any one of the financial statements.
An auditor finds several errors in the financial statements that the client prefers not to correct. The auditor determines that the errors are not material in the aggregate. Which of the following actions by the auditor is most appropriate?
Document the errors in the summary of uncorrected errors, and document the conclusion that the errors do not cause the financial statements to be misstated.The auditor is allowed to "pass" on aggregated errors that are not material. This analysis and conclusion must be documented in the audit documentation.
Which of the following would an auditor most likely use in determining the auditor's preliminary judgment about materiality?
The entity's financial statements of the prior year.Materiality refers to a cutoff amount for a misstatement over which the financial statements would be unfairly presented. In determining this amount, out of the choices given, the most likely source is the prior year financial statements. The statements would provide the auditor with the most information to use in setting materiality.
When planning a sample for a substantive test of details, an auditor should consider tolerable misstatement for the sample. This consideration should
Be related to preliminary judgments about materiality levels.When planning a sample for a substantive test of details, the auditor's consideration of tolerable misstatement for the sample would be related to the preliminary judgment of materiality. The auditor determines the nature, timing, and extent of auditing procedures to be applied in order to obtain reasonable assurance of detecting material misstatements in the financial statements.The preliminary judgment of materiality is the auditor's first estimate of amounts that could be considered to be material.
When issuing an unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the
Estimate of the total likely misstatement is less than a material amount.In order to issue an unqualified opinion, the auditor must be confident that no material misstatements exist in the financial statements. While misstatements may exist, in total they must be believed to be less than a material amount.
In considering materiality for planning purposes, an auditor believes that misstatements aggregating $10,000 would have a material effect on an entity's income statement, but that misstatements would have to aggregate $20,000 to materially affect the balance sheet.Ordinarily, it would be appropriate to design auditing procedures that would be expected to detect misstatements that aggregate
$10,000 Materiality should be considered in terms of the smallest aggregate level of misstatements that could be considered material to any one of the financial statements. As $10,000 is material to the income statement and that amount is smaller than the $20,000 material to the balance sheet, the smaller amount would be used.
An auditor's responsibility to express an opinion on the financial statements is
Explicitly represented in the responsibility paragraphs of the auditor's standard report.GAAS require an auditor to express an opinion on the financial statements. That responsibility is EXPLICITLY represented in the Auditor's Responsibility paragraphs of the auditor's standard report which states that the auditor's responsibility is to express an opinion.
After field work audit procedures are completed, a partner of the CPA firm who has not been involved in the audit performs a second or wrap-up working paper review. This second review usually focuses on
The fair presentation of the financial statements in conformity with GAAP.The review by a second partner is part of a firm's quality control system. It is performed to ensure the fair presentation of the financial statements in conformity with GAAP. While this particular step was not specifically discussed in the Study Text, it is a common part of firm quality control systems and thus important to know (as evidenced by its past inclusion in the exam). If your knowledge of this area is a little hazy, consider looking it up in an auditing textbook for more detailed coverage.
GAAS require the auditor's report to contain either an expression of opinion regarding the financial statements or an assertion to the effect that an opinion cannot be expressed. The objective of this requirement is to prevent
Misinterpretations regarding the degree of responsibility the auditor is assuming.The objective of the requirement is to prevent misinterpretations regarding the degree of responsibility the auditor is assuming when his name is associated with financial statements.
The purpose of establishing quality control policies and procedures for deciding whether to accept or continue a client relationship is to
Minimize the likelihood of associating with clients whose management lacks integrity.The AICPA's Quality Control Standards identify 3 focal points in considering acceptance and continuance issues: (1) the integrity and reputation of management and other relevant persons associated with the entity; (2) whether the CPA has the competence and resources to perform the engagement; and (3) whether the CPA can comply with applicable legal and ethical requirements. Hence, a primary purpose of addressing the acceptance/continuance issues is to avoid association with clients whose management lacks integrity and clients who are otherwise regarded as too risky.
An attestation engagement is one in which a CPA is engaged to
Issue a written communication expressing a conclusion about the reliability of a written assertion that is the responsibility of another party.An attestation engagement is one in which the practitioner is engaged to issue an examination, a review, or an agreed-upon procedures report on subject matter or an assertion about subject matter that is the responsibility of another party.
An entity engaged a CPA to determine whether the client's web sites meet defined criteria for standard business practices and controls over transaction integrity and information protection.In performing this engagement, the CPA should comply with the provisions of
Statements on Standards for Attestation Engagements.The type of engagement described is a WebTrust assurance engagement. It is performed in accordance with the Statements on Standards for Attestation Engagements.
The audit work performed by each assistant should be reviewed to determine whether it was adequately performed and to evaluate whether the
Results are consistent with the conclusions to be presented in the auditor's report.The audit work performed by each assistant should be reviewed for adequacy and to ensure that it supports the conclusions reached.
Which of the following statements would least likely appear in an auditor's engagement letter?
After performing our preliminary analytical procedures we will discuss with you the other procedures we consider necessary to complete the engagement.The engagement letter documents the understanding between the auditor and the client regarding the nature and timing of the services to be performed, expected fees and the basis for billing, the responsibilities of the auditor, the client's responsibilities in preparing for the audit, and the need for other services to be performed. It would not include a statement committing the auditor to discuss the auditing procedures considered necessary. Selection and performance of auditing procedures are a matter of auditor judgment and not subject to disclosure to the client.
Generally accepted accounting principles are applicable only to the financial statements of public companies.
False
The auditor's responsibility for an entity's financial statements is confined to the expression of an opinion on those financial statements.
True
The primary role of the auditor is to provide an impartial assessment of the reliability of management's financial statements.
True
General-purpose financial statements are representations of management.
True
The AICPA principle dealing with performance includes those matters formerly associated with the Fieldwork Standards of GAAS.
True
The AICPA principle on reporting requires the auditor's report to explicitly refer to "accounting principles generally accepted in the United States of America."
False
The AICPA principle dealing with performance takes the place of what previously had been called Reporting Standards under GAAS.
False
The AICPA principle dealing with responsibilities includes the characteristics formerly associated with the General Standards of GAAS.
True
The AICPA uses the term GAAS when referring to the 7 principles adopted by the AICPA to provide a framework for understanding an audit.
False
The 7 principles adopted by the AICPA (to provide a framework for understanding an audit) are organized around 4 main themes: purpose/premise; responsibilities; performance; and reporting.
True
The 10 specific standards formerly known as GAAS in the AICPA's auditing standards have been replaced by 11 principles applicable to audits.
False
The 10 specific standards formerly known as GAAS in the AICPA's auditing standards still remain in effect in the PCAOB auditing standards.
True
Auditors must apply articles in the Journal of Accountancy and the AICPA's CPA letter related to their audit engagements.
False
The AICPA's Statements on Auditing Standards collectively are known as generally accepted auditing standards (GAAS).
True
Generally accepted auditing standards are the criteria by which the fairness of financial statements are evaluated.
False
Identify the topics associated with the three general standards for Generally Accepted Auditing Standards (GAAS), which are still applicable to the PCAOB's auditing standards.
A. General Standards -- There are 3 of these ("TID"). They are "personal" in nature as they relate to qualities that the auditor brings to the assignment:1. Training -- "The auditor must have adequate technical training and proficiency to perform the audit."2. Independence -- "The auditor must maintain independence in mental attitude in all matters relating to the audit."3. Due care -- "The auditor must exercise due professional care in the performance of the audit and the preparation of the report."
AICPA replaced these 10 standards with 7 principles in connection with its Clarified Auditing Standards.
which is the statement of auditing standards
Identify the 4 primary themes associated with the AICPA's 7 principles for audit standard setting.
Purpose/premiseResponsibilitiesPerformanceReportingPRPR
Identify the topics associated with the four reporting standards for Generally Accepted Auditing Standards (GAAS), which are still applicable to the PCAOB's auditing standards.
GAAPConsistencyDisclosureOpinion.GCDP
Identify the topics associated with the three field work standards for Generally Accepted Auditing Standards (GAAS), which are still applicable to the PCAOB's auditing standards.
Field Work Standards -- There are 3 of these ("PIE"). They are related to the evidence-gathering activities that form the foundation for the auditor's conclusions.1. Planning and supervision -- "The auditor must adequately plan the work and must properly supervise any assistants."2. Internal control -- "The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to fraud or error, and to design the nature, timing, and extent of further audit procedures."3. Evidence -- "The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit."
Identify the topics associated with each of the AICPA's 7 principles for audit standard setting.
PurposePremiseResponsibilitiesReasonable assurancePerformance requirements to achieve reasonable assuranceInherent limitationsReporting
In the U.S.A, who issues auditing standards applicable to audits of governmental entities?
U.S. Government Accountability Office (GAO).
In the U.S.A, who issues auditing standards applicable to audits of private companies and other entities known as nonissuers?
AICPA's Auditing Standards Board.
In the U.S.A, who issues auditing standards applicable to audits of public companies (also known as issuers)?
Public Company Accounting Oversight Board (PCAOB).
What is meant by Generally Accepted Auditing Standards (GAAS) under the clarified auditing standards?
The Statements on Auditing Standards issued by the AICPA's Auditing Standards Board.
List some benefits of an audit to a private company (also known as a nonissuer).
More favorable cost of capital;Insights into adequacy of internal controls;Benchmark an entity's performance with other similar entities.
Who is primarily responsible for the fairness of an entity's financial statements?
Management. The financial statements are the representation of management.
What is the auditor's primary role?
To provide an impartial (independent) assessment of the reliability of management's financial statements.
Define "Generally Accepted Accounting Principles (GAAP)."
The standards by which the quality of the financial statements is judged.
"Explanatory material" in AICPA professional standards refers to descriptive guidance that does not impose a professional requirement.
True
"Unconditional requirements" are identified in AICPA professional standards with the word "should."
False
Auditors are required to apply all "interpretive publications" applicable to their audits.
False
Which of the following terms identifies the said requirement for audit evidence?
According to GAAS, which of the following terms identifies a requirement for audit evidence? Appropriate.What are the requirements for audit evidence obtained?
Audit procedures to obtain audit evidence can include inspection, observation, confirmation, recalculation, reperformance, and analytical procedures, often in some combination, in addition to inquiry.Which of the following is the principles of GAAS audit?
General Standards The auditor must have adequate technical training and proficiency to perform the audit. The auditor must maintain independence in mental attitude in all matters relating to the audit.What are the three auditing standards that constitute GAAS?
The 10 standards in the GAAS are grouped into three categories: general standards, standards of field work, and standards of reporting. These standards appear in Table 9.2. 1. The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor. Tải thêm tài liệu liên quan đến nội dung bài viết According to gaas, which of the following terms identifies a requirement for audit evidence?