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Unformatted text preview: Chapter 14: The Auditing Profession CHAPTER 14 The Auditing Profession After studying this chapter, you should be able to: 1. Explain the certification procedures for the accounting profession. 2. Describe limitations in the current audit methodology. 3. Discuss the pressures on management and auditors that make auditing a difficult job. 4. Describe the auditor's responsibility when performing audits, attestation services, compilations, and reviews. 5. Discuss the AICPA Professional Code of Conduct. 6. Explain the International Code of Ethics for Professional Accountants. 7. Describe the legal liability associated with an audit engagement. Chapter 14: The Auditing Profession Chapter Highlights This chapter provides an overview of the professional and legal environment in which the auditor currently practices and provides auditing services. It describes the limitations that auditors face in providing these services considering the internal and external pressures that they face and that their clients face in this competitive environment. The chapter first looks at the professional certification requirements necessary to become a Certified Public Accountant (CPA) in the U.S. Secondly, the chapter examines the ethical environment by reviewing the AICPA Code of Professional Conduct, the additional Independence rules required under Sarbanes-Oxley and the PCAOB, and the IESBA (International Ethics Standards Board for Accountants) international code of ethics. Lastly, the chapter reviews the legal liability which the auditor faces in todays current environment. Chapter Outline 1. Certification Procedures for the Accounting Profession (Slide #1 see companion slides) In the U.S., to become a member of the auditing profession, a candidate must pass the uniform CPA examination and meet the experience requirements established by the state in which the accountant is licensed. In other countries, members of the profession may have to pass licensing exams or obtain a degree from a university program in accounting. Members of the profession pay professional dues and meet yearly continuing professional education requirements to maintain their license to practice as auditors The uniform CPA examination is administered by the AICPA and is composed of four parts: (Slide #2) Auditing and attestation Financial accounting and reporting Regulation Business environment and concepts The Auditing and Attestation section of the CPA exam, beginning January 1, 2011, will require candidates to be familiar with: (Slide #3) The International Auditing and Assurance Standards Board (IAASB) and its role in establishing International Standards on Auditing (ISAs) The differences between ISAs and U.S. auditing standards, and The audit requirements under U.S. auditing standards that apply when audit procedures are performed on a U.S. company that supports an audit report based upon the auditing standards of another country....
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- Spring '11