WP%2002%20students - Chpt 2: Professional Standards...

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WP 02 students Revised Fall 2010 1 of 10 Chpt 2: Professional Standards McKesson & Robbins 1938 Resulted in changes to auditing profession: Authority of regulatory bodies Regulatory Bodies Integrated Audits for Public Companies Audits for Nonpublic Companies PCAOB AICPA State Boards of Accountancy
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WP 02 students Revised Fall 2010 2 of 10 GENERALLY ACCEPTED AUDITING STANDARDS General Standards 1. The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor. 2. In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors. 3. Due professional care is to be exercised in the planning and performance of the audit and the preparation of the report. Standards of Field Work 1. The work is to be adequately planned and assistants, if any, are to be properly supervised . 2. 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. 3. Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit. Standards of Reporting 1. The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles . 2. The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period. 3. Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated in the report. 4. The report shall either contain an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed . When an overall opinion cannot be expressed, the reasons therefore should be stated. In all cases where an auditor’s name is associated with financial statements, the report should contain a clear-cut indication of the character of the auditor’s work, if any, and the degree of responsibility the auditor is taking.
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WP 02 students Revised Fall 2010 3 of 10 GAAS General Standards: affect all phases of the audit, including client acceptance or retention. 1. Competence: 2. Independence: 3. Due professional care : GAAS Fieldwork standards: General quality criteria for conducting an audit. Accumulating and Evaluating Evidence 1. Planning and supervision: 2. Internal control: A system’s capability to prevent or detect material accounting errors or frauds and provide for their correction on a timely basis.
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This note was uploaded on 11/22/2010 for the course BUSINESS 4230 taught by Professor Dee during the Spring '10 term at Community College of Denver.

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WP%2002%20students - Chpt 2: Professional Standards...

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