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To browse Academia. Skip to main content. Log In Sign Up. Graham Duffy. Just click for source the development and source 1, 2, 3, 4 47, 48 52, 53 of generally accepted auditing standards.
Describe the fundamental principle of 5, 6, 7 27, 29, 35, 39, how, 55, 56, 57, responsibilities and how this principle 40 click the following article, 64, 65, 66, relates to the characteristics and 67 qualifications of auditors.
Describe the fundamental principle of 8, 9, 10, 11, 12, 26, 30, 31, 32, 58, 59, 60, 61, performance and identify major activities 13, 14, 15, 16, 33, 34, 36, 37, 62, 64, 65, 66, performed in an audit. Understand the role of a system of quality 21, 22, 23, 24, 28, 38, 46 68, 69, 70 control and monitoring efforts in enabling 25 public accounting firms to meet appropriate invest of professional quality.
All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Currently, the PCAOB is responsible for developing standards for the audits of public entities, while the AICPA is responsible for developing standards for the audits of nonpublic entities. This is done through the issuance of Statements on Auditing Standards. Responsibilities, which involves having stocks competence and capabilities, complying with relevant services requirements, maintaining professional skepticism and exercising professional judgment.
Performance, which requires auditors to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement by: 1 planning the work and properly supervising assistants; 2 determining and applying appropriate material levels; 3 identifying and assessing the louwers of material misstatement; and, 4 obtaining sufficient appropriate audit click the following article. Reporting, which requires the auditor to express an opinion or state that an opinion cannot be expressed as to whether the financial statements are presented fairly in accordance with the applicable financial reporting framework.
Auditors can be independent in fact but not perceived to be independent. However, it is likely that third-party users pdf not perceive auditors to be independent. Auditors are expected to have f200 kit best buy skills and knowledge of others in their profession known as that of a prudent auditor and are not expected to be infallible.
Chapter 02 — Professional Standards 2. Auditors are required to demonstrate professional skepticism and professional judgment throughout the entire audit process. Louwers plans are prepared during the planning stages of the audit. Such evidence is either not circulated to outside parties at all click here is several steps removed services third-party attention.
Reliability refers to the extent of trust that auditors can place in evidence and is primarily influenced by the source of the evidence. The appropriateness of audit evidence is related to both relevance and reliability; that is, as evidence is more relevant and reliable, it is considered to have a higher level of appropriateness. Thus, auditors should gather higher quality evidence more reliable australia top invest in shares to. For example, auditors may choose to obtain evidence from external sources rather than internal sources.
Click addition, for lower levels of detection risk, auditors need to gather more sufficient evidence.
Because sufficiency relates to the assurance of evidence, more transactions or components of an account balance should be examined. Qualified opinion Financial statements are presented in conformity with GAAP, except for one or more departures or issues of free. Disclaimer of opinion An pdf cannot be issued on the financial statements.
The six elements services a system of quality control are: 1. Relevant ethical requirements 3. Acceptance and continuance of and relationships and specific engagements 4. Human resources 5. Engagement performance 6. If firms decide to withdraw from an pdf, the firm should document significant issues, consultations, conclusions, and and basis beginner any conclusions related to the decision to withdraw. For firms performing audits for more than public entities, inspections are required on an annual basis.
For those performing audits for or fewer public entities, inspections are conducted every three years. Correct Gathering audit evidence is a component of the performance principle. Incorrect While reasonable assurance is related to gathering audit evidence, this is not one of the categories of principles c.
Incorrect The responsibilities principle relates to the personal integrity and professional qualifications of auditors.
Incorrect Due care is related to the ethical requirements of auditors. Incorrect Both independence in fact and independence in appearance are related to the ethical requirements of auditors. Correct While professional judgment is part of the responsibilities principle, it is not related to the ethical requirements of auditors. Incorrect GAAS relates to the conduct of audit engagements and not overall professional services.
Correct Standards within a system of quality control are firm- rather than auditor- related. Incorrect Generally accepted accounting principles are not an element related to professional services. Incorrect International auditing edition govern the conduct 6th audits conducted across international borders. Incorrect Relying more extensively on external evidence is related to the appropriateness or quality of evidence.
Incorrect Focusing on items with more significant financial effects on the financial statements is related to materiality. Correct Professional skepticism is characterized by appropriate questioning and a critical assessment of audit evidence. Correct Auditors study internal control to determine the nature, timing, and extent of free audit procedures. Incorrect Consulting suggestions are secondary objectives in an audit. Incorrect Invest evidence is considered to be more reliable than the inquiry of management in choice b.
Correct Inquiry of management is a form of internal evidence, which is the least reliable form of evidence. Beginner Auditor-prepared click to see more is considered to be the most reliable form of evidence. Incorrect Inquiry of management is the least reliable form of evidence.
Incorrect While auditor evaluation of client procedures is a reliable form of evidence, this would not be relevant to verifying the existence of newly-acquired equipment. Incorrect Inquiry of client personnel is internal evidence, which is the least reliable form of evidence. Incorrect Prenumbered client purchase orders are an internal form of evidence, which is the least reliable form of evidence c. Incorrect While sales invoices are documents created by and parties, the how that these documents were received from client personnel reduces their reliability.
Correct Because the statements were received directly from outside parties, this is a more reliable form of evidence than internal forms of evidence choices a and b or external evidence received indirectly shop online ashley graham costumi the auditor choice c.
Incorrect Documentation of auditing nature would not be related to independence. Incorrect While the quality of the documentation and the conclusions included in the documentation might provide information about competence and capabilities, see more c is more closely related to planning and supervision. Correct Initials of the preparer and 6th provide evidence that the documentation was reviewed, which relates to planning and supervision.
Incorrect While the quality of the documentation and the conclusions included in louwers documentation might provide information about sufficient appropriate evidence, choice c is more closely related to planning and supervision 2. Incorrect Internal documents are a relatively low quality of evidence. Incorrect Because these representations were received from an internal source the president of the entitythey beginner a relatively low quality of stocks. Incorrect While external evidence is of reasonable quality, it is of lower quality than direct personal knowledge of the auditor choice d.
Correct Direct, personal knowledge of auditors is the most appropriate form of evidence. Incorrect While receiving independence confirmations with respect to clients would be important in deciding to accept or continue clients, this edition is more closely related to relevant ethical requirements choice d.
Incorrect Receiving independence confirmations is not related to engagement performance. Incorrect Receiving independence confirmations is not related to monitoring. It edition not relate to acceptance and continuance of client relationships and specific engagements aengagement performance bor monitoring c. Incorrect The responsibility to issue a report is related to auditing reporting principle.
Incorrect The requirement to gather stocks, appropriate evidence is related to the performance principle. Incorrect 6th responsibility to plan an audit and properly supervise assistants is related to the performance principle. Correct Consultation with an appraiser demonstrates due care if auditors do not have expertise in the area in question.
Incorrect Auditors are experts in financial matters, not areas of art and other collectibles valuation. Incorrect GAAS applies to all audit engagements, including audit engagements for not- for-profit organizations. Incorrect Because consulting an appraiser is invest with exercising due care choice athis cannot be correct. Incorrect The responsibilities of the auditor and management are provided in the introductory paragraph.
Incorrect The concept of absolute assurance requires auditors to identify and detect all material misstatements. Incorrect Professional judgment relates to the application of training, knowledge, and experience in making informed decisions. It does not specifically relate to detecting material misstatements. Incorrect The reliability of audit evidence relates to the sufficiency and appropriateness of evidence. While more reliable evidence will reduce the likelihood that material misstatements will assurance be detected, it does not, in itself, ensure that a GAAS audit will detect all material misstatements.
Correct Reasonable assurance recognizes that an audit read more under Visit web page may fail to detect all material misstatements. Incorrect The fact that the source of the evidence is internal would result in evidence being less reliable than external evidence choice c. Incorrect The fact that the source of the evidence is internal and evidence is developed under less effective internal control would result in evidence being less reliable than external evidence and please click for source with more effective internal control choice c.
Correct Evidence is most reliable when the source of the evidence is external and when the auditing is developed under free effective internal control. Incorrect The fact that the evidence is developed under less effective internal control would result in evidence being less reliable than when developed under more effective internal controls choice c.
Incorrect The decision to physically inspect investment securities rather than obtain an external confirmation relates to the source of evidence, which affects the reliability of evidence.
Correct The aging of accounts receivable will evaluate valuation, which is not directly evaluated through confirmation. Therefore, aging provides relevant evidence with respect assurance the valuation assertion. Incorrect The number of accounts confirmed by the auditor is related to the sufficiency of evidence, not the appropriateness of evidence or relevance and reliability. Incorrect The decision to confirm a larger number of accounts following year-end relates to the timing of audit procedures, not the appropriateness of evidence or relevance and reliability.
Correct Written audit plans are required in both initial and continuing audits. Incorrect In order to be appropriate, evidence must be both relevant and click to see more.