lec 3 - 27/09/2010 Auditing Standards & Audit Planning...

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27/09/2010 1 Audit Planning 2 RSM323 Auditing I: Fall 2010 Agenda Recap of Lecture #2 Auditing Standards Overview of the Audit Process Client Acceptance Understanding the Engagement Financial Statement Assertions Audit Planning 3 RSM323 Auditing I: Fall 2010 Recap of Lecture #2 Quiz #1 Any questions before moving on? 4 RSM323 Auditing I: Fall 2010 Auditing Standards RSM323 Auditing I: Fall 2010 5
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27/09/2010 2 Practice Standards There are three general categories of practice standards for audits of financial statements: Generally Accepted Auditing Standards (GAAS) General Quality Control Standards Other Quality Control Standards 6 RSM323 Auditing I: Fall 2010 Auditing Standards: GAAS Remember from Lecture #1 that the purpose of an audit of financial statements is to express an opinion whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework In order to express that opinion, the auditor must adhere to the auditing standards (GAAS or the CASs) CAS 200 contains the overall objectives and requirements that remain consistent over time and for all audits 7 RSM323 Auditing I: Fall 2010 Auditing Standards: CAS 200 Overall Objectives of the Auditor To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error in order to express his/her opinion on the financial statements To report on the financial statements and communicate them as required by the CASs and in accordance with the auditor’s findings 8 RSM323 Auditing I: Fall 2010 Auditing Standards: CAS 200 Requirement #1: Ethical Requirements The auditor shall comply with relevant ethical requirements , including those pertaining to independence, relating to financial statement audit engagements 9 RSM323 Auditing I: Fall 2010
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27/09/2010 3 Auditing Standards: CAS 200 Requirement #2: Professional Skepticism The auditor shall plan and perform an audit with professional skepticism recognizing that circumstances may exist that cause the financial statements to be materially misstated 10 RSM323 Auditing I: Fall 2010 Auditing Standards: CAS 200 Requirement #3: Professional Judgment The auditor shall exercise professional judgment in planning and performing an audit of financial statements 11 RSM323 Auditing I: Fall 2010 Auditing Standards: CAS 200 Requirement #4: Audit Evidence and Audit Risk To obtain reasonable assurance, the auditor shall obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level and thereby enable the auditor to draw reasonable conclusions on which to base the auditor’s opinion 12 RSM323 Auditing I: Fall 2010 Auditing Standards: CAS 200 Requirement #5: Audit in Accordance with CASs The auditor shall comply with all CASs relevant to the audit. A CAS is relevant to an audit when the CAS is in effect and the
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This note was uploaded on 05/09/2011 for the course RSM 323 taught by Professor Lisaharvey during the Spring '11 term at University of Toronto.

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lec 3 - 27/09/2010 Auditing Standards & Audit Planning...

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