Auditing Concepts - Chapter 2 Exercises, Problem, & Simulations 2.55 (CH)

Auditing Concepts - Chapter 2 Exercises, Problem, & Simulations 2.55 (CH)

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ACCT_4263_61: Auditing Concepts Chapter 2: Exercise, Problems, Simulations #2.55 BRIEF DESCRIPTION OF GAAS HOLMES' ACTIONS RESULTING IN FAILURE TO COMPLY WITH GAAS GENERAL STANDARDS 1. The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor. 1. It was inappropriate for Holmes to hire the two students to conduct the audit. The audit must be conducted by persons with proper education and experience in the field of auditing. Although a junior assistant has not completed his formal education, he may help in the conduct of the audit as long as there is proper supervision and review. 2. In all matters relating to the assignment, independence in mental attitude is to be maintained by the auditor or auditors. 2. To satisfy the second general standard, Holmes must be without bias with respect to the client under audit. Holmes has an obligation for fairness to the owners, management, and creditors who may rely on the report. Because of the financial interest in whether the bank loan is granted to Ray, Holmes is independent in neither fact nor appearance with respect to the assignment undertake 3. Due professional care is to be exercised in the performance of the audit and the preparation of the report. 3. This standard requires Holmes to perform
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Auditing Concepts - Chapter 2 Exercises, Problem, & Simulations 2.55 (CH)

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