Professional Documents
Culture Documents
Professional
Standards
McGraw-Hill/Irwin
Authority of Organizations
2-2
2-3
Purpose
of an audit
Premise of an audit
Personal responsibilities of the auditor
Auditor actions in performing the audit
Reporting results of an audit
2-4
Purpose
of an auditProvide an opinion
on financial statements are in accordance
with the applicable financial reporting
framework.
2-5
Premise
of an auditManagement (and
those charged with governance) have
responsibility to:
2-6
Personal
Auditor
Reporting
2-9
General
Standards
Standards of Field Work
Reporting Standards
Gener
Trainin
Indepe
Profes
Field W
Planni
Interna
Eviden
Accou
Consis
Disclo
Opinio
2-10
Independence
in mental attitude is to be
maintained
Due
2-11
Meaning
Unconditional
Responsibility
Must
Shall (PCAOB only)
Is required (PCAOB only)
Presumptively
Mandatory
Should
Responsibility to
Consider
May
Might
Could
Other phrases indicating a
responsibilities to consider
2-14
2-15
2-16
2-17
Specific procedures:
Inquire of management as to compliance
Inspect correspondence with licensing or regulatory authorities
2-19
2-20
2-21
2-22
GAAP
Financial statements follow GAAP and auditor does not add additional
commentary for any issue
Other reports
Qualified opinion
Scope limitation or departure from GAAP
Adverse opinion
Departure from GAAP so significant that financial statements as a
whole are misleading
Disclaimer of opinion
Unable to arrive at an opinion due to a very significant scope limitation
2-25
Applicability of SSAEs
2-27
2-30
2-31
2-32
QC Element 5: Engagement
Performance
Engagement performance.
Supervision responsibilities.
Review responsibilities.
2-33
QC Element 6: Monitoring
Firms
2-34
Public Companies
Nonpublic Companies
2-36
PCAOB
Composed
be CPAs
Members appointed by SEC and may
serve no more than two five-year terms
All accounting firms that audit SEC
registrants must register with PCAOB
Peer Reviews
Members of AICPA
Conducted by CPAs or other CPA firms
Two types of peer reviews
System review
Study of CPA firms system of quality control
Select sample of firms engagements and examine related
working paper files
Engagement review
Sample of CPA work including reports to evaluate
appropriateness
Less in scope than system review
PCAOB Inspections
Conducted
by PCAOB staff
An audit
designed
reasonab
Primarily evaluating performance of sample of assuranc
individual audit and review engagements; a risk detecting
misstate
based approach to selection and inspection is to :
Errors; fr
used.
noncomp
Selected quality control and management issues all laws
Focus
International Accounting
Standards
International
Financial Reporting
Standards (IFRS)
2-40
2-41