AUD 1

AUD 1 - Term Definition What is the objective of the...

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Term: What is the objective of the independent audit? Definition: To express an opinion stating whether the financial statements, taken as a whole, are fairly presented in all material respects in conformity with accounting principles generally accepted in the USA. Term: Which standards provide the most authoritative US auditing guidance for nonissuers and issuers and who issues those standards? Definition: Nonissuers - Statements on Auditing Standards (SASs), issued by the AICPA Auditing Standards Board. Issuers - Auditing Standards (ASs), issued by the Public Company Accounting Oversight Board (PCAOB) plus all SAS adopted by the PCAOB. Term: What are the three general standards? Definition: The auditor must have adequate technical TRAINING and proficiency to perform the audit. The auditor must maintain INDEPENDENCE in mental attitude in all matters realting to the audit. The auditor must exercise due PROFESSIONAL CARE in the planning and performance of the audit and the preparation of the report.
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Term: What are the three standards of fieldwork? Definition: The auditor must adequately PLAN the work and must properly supervise any assistants. The auditor must obtain a sufficient understanding of the entity and its environment, including its INTERNAL CONTROL, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature timing, and extent of further audit procedures. The auditor must obtain sufficient appropriate audit EVIDENCE by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit.
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Term: What are the four standards of reporting? Definition: 1. The auditor must state in the auditor's report whether the financial statements are presented in accordance with generally accepted ACCOUNTING PRINCIPLES. 2. The auditor must identify iin the auditor's report those circumstances in which such prinsiples have not been CONSISTENTLY observed in the current period in relation to the preceding period. 3. When the auditor determines that informative DISCLOSURES in the financial statements are not reasonably adequate, the auditor must so state in the auditor's report. 4. The auditor must either express an OPINION regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed, in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefor in the auditor's report. In all cases where an auditor's name is associated with financial statements, the auditor should clearly indicate the character of the auditor's work, if any and the degree of responsibility the auditor is taking, in the auditor's report.
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Term: What should be included in the introductory paragraph of the auditor's standard report under US auditing standards?
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