CACC521 CH02

CACC521 CH02 - 1 LEARNING OBJECTIVE#1 LIST THE VARIOUS...

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1 LEARNING OBJECTIVE #1 LIST THE VARIOUS PRACTICE STANDARDS FOR INDEPENDENT AUDITS OF FINANCIAL STATEMENTS AUDITING STANDARDS V. AUDITING PROCEDURES Auditing standards are AUDIT QUALITY RECOMMENDATIONS that remain the same over time and for all audits Auditing procedures are PARTICULAR AND SPECIALIZED ACTIONS auditors take to obtain evidence in a specific audit engagement AUDIT PROCEDURES MAY VARY DEPENDING ON THE COMPLEXITY OF AN ACCOUNTING SYSTEM audit reports refer to an audit conducted “in accordance with GAAS” rather than “in accordance with auditing procedures Practice standards are general guides for professional work. 1. Generally accepted auditing standards (GAAS). 2. Assurance standards. 3. General Standards of Quality Control for Firms Performing Assurance Engagements. 4. Quality control standards as reflected in peer reviews and practice inspections GENERALLY ACCEPTED AUDITING STANDARDS (GAAS) The objectives and key principles are found in CAS/ISA 200 (Overall Objective of the independent Auditor, and the Conduct of the Audit in Accordance with CASs) CAS: Canadian auditing standards – this includes Canadian Auditing Practice Statements (CAPs) or Audit Guidelines (AuGs) IF a relevant CAS objective CANNOT be achieved in an audit, the auditor has to CONSIDER WHETHER THE OVERALL OBJECTIVES OF THE AUDIT, AS STATED IN CAS 200, CAN BE MET EXHIBIT 2-1 GAAS ARE AS FOLLOW Summarization of CASs 1. Objective of an Audit of Financial Statements 2. General Standards 3. Examination Standards 4. Reporting Standards 5. Skepticism Objective of an Audit of Financial Statements: Enable the auditor to express an opinion on whether the FSs are prepared (in all material respects) with an ACCEPTABLE financial reporting framework (fair presentation framework) This objective implies 3-party accountability General Standard personal integrity and professional qualifications of auditors Auditor must COMPLY WITH RELEVANT PROFESSIONAL ETHICAL REQUIREMENTS relating to audit engagements 1. Competence 2. Objectivity
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2 3. Due Professional Care COMPETENCE IS GAINED THROUGH EDUCATION AND EXPERIENCE. Competence allows the auditor to: 1. recognize underlying assertions made by management, 2. decide which evidence is relevant to support assertion, 3. select and perform procedures for obtaining evidence, and 4. evaluate evidence for reality and conformity to GAAP. OBJECTIVITY AUDITORS ARE EXPECTED TO BE UNBIASED AND IMPARTIAL Objectivity is achieved by maintaining independence Independence in fact is the mental attitude, or state of mind of the auditor DUE PROFESSIONAL CARE REQUIRES OBSERVANCE OF THE RULES OF PROFESSIONAL ETHICS AND GAAS Auditors must be competent and independent : 1. exercising proper care in planning and supervising the audit 2. in understanding the auditee’s control structure 3. obtaining sufficient appropriate evidence AUDITORS CANNOT EFFECTIVELY SATISFY DUE PROFESSIONAL CARE IF THEY HAVE NOT
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CACC521 CH02 - 1 LEARNING OBJECTIVE#1 LIST THE VARIOUS...

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