Presentation Chapter 9

Presentation Chapter 9 - Chapter IX External Auditors Roles...

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Click to edit Master subtitle style External Auditors’ Roles and Responsibilities Chapter IX
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Click to edit Master subtitle style Chapter Objectives: • Recognize the role independent auditors play in achieving effective corporate governance and reliable financial reports. • Understand the history of auditing, the traditional roles of auditors, and regulations recently placed on them. • Address the expectation gap regarding what auditors can provide in the way of reasonable assurance and the expectations of investors for a higher level of assurance. • Identify the roles and responsibilities of the PCAOB, and discuss the auditing standards published by the PCAOB. • Demonstrate the importance of auditor independence both in fact and in appearance. • Discuss an integrated audit of both financial statements and ICFR. • Address the issue of a liability cap for independent auditors, and understand the rationale on both sides of the issue. VIDEO ( VIDEO) http://lp.wileypub.com/markopolos/ VIDEO
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Click to edit Master subtitle style Key Terms The Accountancy Investigation & Discipline Board (AIDB) Audit quality Audit risk Audit strategy Auditor independence Control risk Detection risk Expectation gap Inherent risk Integrated audit approach Internal Revenue Service (IRS) International Standards on Auditing (ISAs) PCAOB-US Professional Ethics Executive Committee (PEEC) Standing Advisory Group (SAG) Statements on Auditing Standards http://www.youtube.com/watch?v=VWIlHl3j7CQ ,Video
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Click to edit Master subtitle style External Auditing and Corporate Governance
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Click to edit Master subtitle style External Auditor Responsibility Current auditing standards require that independent auditors provide reasonable assurance that the financial statements are free from material misstatements, whether caused by error or fraud, to render an unqualified opinion on the financial statements. External auditors are not and should not be expected to provide absolute assurance regarding reliability of financial statements, but the public expectations concerning external auditors performance are high. Users of audited financial statements generally expect external auditors to detect financial statement fraud and employees’ illegal acts and fraud, which affects the integrity of financial reports. External auditors, however, are more concerned with material misstatements in the audited financial statements.
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Click to edit Master subtitle style Auditor Competency 1. Professional competencies. To audit public companies, auditors should register with the PCAOB and meet all registration and inspection requirements. 2. Technical competencies. Auditors should be knowledgeable in professional standards, rules, laws and regulations, and understand their clients’ industry and business, corporate governance, financial reporting process, and internal controls.
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This note was uploaded on 02/24/2011 for the course ACCT 7050 taught by Professor Razai during the Spring '11 term at U. Memphis.

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Presentation Chapter 9 - Chapter IX External Auditors Roles...

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