AC 432 Chapter 2

General Standards

- Adequate technical training and proficiency - independence - due professional care *who do you want to be the auditor?

general standards

- Adequate technical training and proficiency -independence - due professional care

Standards of Reporting

- GAAP - Consistency - Disclosures - Opinion

Fieldwork

- adequate planning and proper supervision - 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 (understand business processes) - relevant and reliable evidence *what does the auditor do?

three categories of GAAS

- general standards - field work - reporting

international auditing and assurance standard board (IAASB)

- international - set international auditing standards - similar to PCAOB - over 100 countries

American Institute of Certified Public Accountants (AICPA)

- set rules and standards that guide audit for CPAs - not governmental - non-public companies

Reporting

- state if financials are reported in accordance with GAAP - identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period (Consistency) - Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated - an opinion should be expressed or statement explaining why no opinion can be expressed

Standards of Field Work

1. Adequate planning & supervised assistants 2. Obtain sufficient understanding of internal controls (nature, time, extent) 3. Obtain sufficient appropriate evidential matter

International Accounting Standards Board (IASB)

An international accounting standard-setting body responsible for the convergence of accounting standards worldwide. - write IFRS

Securities and Exchange Commission (SEC)

The agency of the U.S. government that oversees U.S. financial markets and accounting standard-setting bodies.

GAAS and SAS

considered to be minimum standards of performance for auditors

Public Accounting Oversight Board (PCAOB)

determines auditing standards and reviews auditing firms - created by sarbanes oxley - board members are elected and overseen by the SEC - public companies

Statements on Auditing Standards (SASs)

pronouncements issued by the AICPA to interpret the principles underlying generally accepted auditing standards

Auditing Standards

serve as guidelines for and measures of the quality of the auditor's performance

Financial Accounting Standards Board (FASB)

the private board that establishes the generally accepted accounting principles used in the practice of financial accounting - write GAAP