Audit 113 cards

Tagged as: accounting, business, finance, computer science, language

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1

Audit responsibilities

--Management has responsbility for the F/S and IC --Auditors have the responsibility to express and opinion

2

Auditor must be...

--Indpendent --Expert as to accounting (GAAP), auditing (GAAS), and the client's particular business --Able to exert professional skepticism

3

Fair presentation

--F/S reflect underlying transactions within a range of acceptable limits

4

PCAOB

--Issuers subject to rules of SEC --Public accouting firms must register with PCAOB to audit issuers

5

GAAS hierarchy

1) AICPA Statements on Auditing Standards and PCAOB Auditing Standards --Use professional judgment in application and be prepared to justify any departures 2) Interpretive publications --Recommended 3) Other auditing publications --Not

6

Language within SAS and PCAOB SAs

--"Must" or "is required" means an unconditional requirement --"Should" means that rare departures must be justified --"May," "might, or "could" means purely explanatory material

7

3 sets of GAAS

1) General standards 2) Standards of fieldwork 3) Standards of reporting

8

3 general standards

T-I-P 1) Training 2) Independence 3) Professional care (professional skepticism)

9

Standards of fieldwork

1) Planning and supervision 2) Obtain understanding of IC, entity, and environment 3) Obtain sufficient and appropriate evidence

10

Standards of reporting

1) Accouting assessed in accorance with GAAP (explicit in audit report) 2) Identify in audit report areas where principles were not consistently observed 3) " " " " instances in which disclosures were not adequate 4) Express opinion on

11

Auditor's standard report (unqualiied opinion)

INDEPENDENT AUDITOR'S REPORT --Address to company, stockholders, or board --Introductory paragraph --Scope paragraph --Opinion paragraph --Firm name --Report date

12

Introductory paragraph

We have audited the accompanying B/S of ABC Company as of December 31, 20XX, and the related statements of income, RE, and CFs for the year then ended. These F/S are the resp. of company management. Our resp. is to opine on these F/S based on our a

13

Scope paragraph

We conducted our audit in accordance with auditing standards generally accepted in the US. Those standards require that we plan and perform the audit to obtain reasonable assurance aboout whether the F/S are free of material misstatement. An audit