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Unformatted text preview: Chapter 02 - Professional Standards CHAPTER 2 Professional Standards LEARNING OBJECTIVES Review Checkpoints Exercises, Problems, and Simulations 1. Name the various practice standards for internal, governmental, and independent auditors and accounting firms and identify their sources. 1 46 2. Explain the 10 AICPA generally accepted auditing standards (GAAS) and explain how GAAS was or was not followed in specific fact situations. 40, 41, 42, 44, 45, 50, 51 3. Describe how the audit examination is affected by auditors responsibility for the general standards and standards of field work. 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 55 4. List the standards of reporting and identify how these standards are reflected in the content of the auditors report. 12, 13, 14, 15, 16 43, 47, 48, 56 5. Identify the need for attestation standards and explain how attestation standards differ from generally accepted auditing standards. 17, 18 49 6. List and explain the important features of quality control standards for an accounting firm. 19, 20, 21 52, 54 2-1 Chapter 02 - Professional Standards SOLUTIONS FOR REVIEW CHECKPOINTS 2.1 For independent auditors of financial statements, practice standards are issued by the AICPA Auditing Standards Board (in the form of Statements on Auditing Standards) and the Public Company Accounting Oversight Board (in the form of Auditing Standards). Statements on Auditing Standards are appropriate for the audits of nonpublic entities, while Auditing Standards are appropriate for the audits of public entities. For governmental auditors, the Government Accountability Office issues Government Auditing Standards (also known as the Yellow Book). For internal auditors, the Institute of Internal Auditors issues Statements of Internal Auditing Standards (also known as the Red Book). For fraud auditors, the Association of Certified Fraud Examiners issues Professional Standards and Practices for Certified Fraud Examiners. For auditors in other countries, the IFAC International Auditing and Assurance Standards Board issues International Standards on Auditing and Assurance. 2.2 Auditing procedures relate to acts to be performed during the engagement. Auditing standards deal with measures of the quality of performance of those acts and the objectives to be attained. Auditing standards are less subject to change and provide the criteria for rejecting, accepting, or modifying auditing procedures in a given circumstance. An example of the relative stability of standards and procedures is found in the change from non-computerized information systems to computerized information systems. New auditing procedures were required to evaluate computerized information systems, but auditing standards remained unchanged and were the criteria for determining the adequacy of the new auditing procedures....
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This note was uploaded on 01/21/2010 for the course ACC 492 ACC 492 taught by Professor Benmathews during the Spring '09 term at University of Phoenix.
- Spring '09