Chat6 Auditing Ch 12

Chat6 Auditing Ch 12 - Auditors add value to information by...

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Unformatted text preview: Auditors add value to information by being independent and conforming to professional auditing standards (GAAS or GAGAS) GAGAS applies to audits of nonfederal entities that expend at least $500,000 of federal awards GAGAS are broader than GAAS in that they include standards for financial and performance audits and attestation engagements The single audit improves both the efficiency and effectiveness of audits of nonfederal entities with significant expenditures of federal awards Summary Learning Objectives After studying Chapter 12, you should be able to: h Explain the essential elements of financial audits by independent CPAs, including: l The objective(s) of financial audits l The source and content of GAAS l Audit report formats and opinions l The audit process Learning Objectives (Cont’d) h Explain what is meant by GAGAS, the source of GAGAS, and why and how GAGAS are broader than GAAS h Explain the types of audits performed under GAGAS, including financial audits, attestation engagements and performance audits Learning Objectives (Cont’d) h Explain the essentials of a single audit, including: ¡ The purpose and scope ¡ Major program identification ¡ Audit work required ¡ Reports that must be submitted, and when and to whom h Describe the implications of the Sarbanes-Oxley Act of 2002 on governments and not-for-profit organizations Objective of a Financial Audit The independent auditor’s objective is to render a report expressing an opinion that the financial statements present fairly the financial position, changes in financial position, and, where applicable, cash flows of the organization v “Present fairly” means in conformity with appropriate generally accepted accounting principles (GAAP) v Opinions are based on reasonable assurance that the statements are free from material misstatements Auditors performing financial audits follow GAAS, reflected in Statements of Auditing Standards (SASs) issued by the AICPA...
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This note was uploaded on 08/01/2011 for the course ACCT 434 taught by Professor Mcclellan during the Spring '11 term at National.

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Chat6 Auditing Ch 12 - Auditors add value to information by...

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