Chap002 - Chapter 02 - The Financial Statement Auditing...

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Unformatted text preview: Chapter 02 - The Financial Statement Auditing Environment Chapter 2 The Financial Statement Auditing Environment Learning Objectives Review Questions Multiple- Choice Questions Problems Discussion Cases Internet Assignments/ ACL Problems LO 1 : Understand the significant changes that have taken place in the auditing profession over the past several years. 1,2 15 LO 2: Recognize that auditing takes place in a context that is shaped largely by the audit client’s business, industry, and economic environment. 27 LO 3: Understand a high-level model of a business entity, including corporate governance, objectives, strategies, processes, controls, transactions, and financial statements. 3,4 16 LO 4 : Be familiar with a five- component model of business processes (or cycles) that auditors often use in organizing the audit into manageable components. 4 16 LO 5 : Recognize the sets of management assertions that are implicit in a business entity’s financial statements. 5 ACL LO 6 : Understand that auditing standards are established by the AICPA’s Auditing Standards Board (ASB) for private entities, and by the Public Company Accounting Oversight Board (PCAOB) for public companies. 17 LO 7: Be familiar with the 10 “generally accepted auditing standards” (GAAS). 6 18 24,25 27 LO 8: Understand the nature of the Statements on Auditing Standards as interpretations of the 10 GAAS. LO 9: Be aware that the PCAOB adopted the ASB’s SAS on an interim basis and is now issuing its own Auditing Standards (AS) that apply to the audits of public companies. LO 10: Understand that auditing is a profession that places a premium on ethical behavior and that is governed by a Code of Professional Conduct. 7 28 2-1 Chapter 02 - The Financial Statement Auditing Environment LO 11: Know that management is primarily responsible for the entity’s financial statements and understand the auditor’s responsibility for detecting errors, material fraud, and illegal acts. 8 19 LO 12: Understand the organization and composition of public accounting firms. LO 13: Be familiar with the various services offered by assurance providers. 9 22,23 26 27 30 LO 14: Be familiar with the different types of auditors. 10 21 26 30 LO 15: Identify and be familiar with the major organizations that affect the public accounting profession’s environment. 11,12,13, 14 20 29,30 2-2 Chapter 02 - The Financial Statement Auditing Environment END OF CHAPTER MATERIALS COMPARISION CHART Number in 6 th edition Compariso n Number in 5 th edition 2-1 Unchanged 2-1 2-2 Unchanged 2-2 2-3 Unchanged 2-3 2-4 Unchanged 2-4 2-5 Unchanged 2-5 2-6 Unchanged 2-6 2-7 Unchanged 2-7 2-8 Unchanged 2-8 2-9 Unchanged 2-9 2-10 Unchanged 2-10 2-11 Unchanged 2-11 2-12 Unchanged 2-12 2-13 Unchanged 2-13 2-14 Unchanged 2-14 2-15 Unchanged 2-15 2-16 Unchanged 2-16 2-17 Unchanged 2-17 2-18 Unchanged 2-18 2-19 Unchanged 2-19 2-20 Unchanged 2-20 2-21 Unchanged 2-21 2-22 Unchanged...
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This note was uploaded on 04/05/2011 for the course ACC 311 taught by Professor Hogwarts during the Spring '11 term at Michigan State University.

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Chap002 - Chapter 02 - The Financial Statement Auditing...

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