Shared Flashcard Set


Auditing Standards
General, fieldwork, and reporting standards
Undergraduate 4

Additional Accounting Flashcards




What are the Three General Standards?
1. The audit is to be performed by a person or persons having adequate technical training & proficiency as an auditor

2. In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors

3. Due professional Care is to be exercised in the performance of the audit and the preparation of the audit report
What are the three Standards of Fieldwork?
1. The work is to be adequately planned & assistants, if any, are to be properly supervised

2. A sufficient understanding of internal control is to be obtained to plan the audit and to determine the nature, timing, and extent of tests to be performed

3. Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit
What are the Four Standards of Reporting
1. The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles (GAAP)

2. The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period

3. Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated in the report

4. The report shall contain either an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefor should be stated. In all cases where an auditor's name is associated with financial statements, the report should contain a clear-cut indication of the character of the auditor's work, if any, and the degree of responsibility the auditor is taking.
What are the three responsibility levels associated with an auditor?
1. Unconditional Responsibility
2. Presumptively Mandatory Responsibility
3. Responsible to Consider (Only established via PCAOB documents)
Responsibility: Unconditional. When a standard is designated "Unconditional", what does this imply?
The Auditor must comply with requirements in all cases where the requirement is relevant
Responsibility: Presumptively Mandatory. When a standard is designated "Presumptively Mandatory", what does this imply?
The Auditor must comply with requirement in all cases in which the requirement is relevant, except in rare circumstances when the auditor makes a judgment that it is necessary to depart from the standard. deviations should always be supported & documented
Responsibility: To Consider. When a standard is designated "To Consider", what does this imply?
When the auditor follows the standards depends on exercise of professional judgment- deviations should always be supported & documented
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