Holding a belief that a potential conflict of interests always exists causes
auditors to perform procedures to search for errors or irregularities that would
have a material effect on financial
Audit planning means developing a general strategy and a detailed approach for
the expected nature, timing, and extent of the audit. The auditor plans to
perform the audit in an effic
Examples of typical lawsuits against CPAs are
Alleged misstatements that the auditor did not detect in the financial
1) improper or inadequate disclosure
2) inappropriate valua
There is a special need for ethical behavior by professionals to maintain public
confidence in the profession, and in the services provided by members of that
Foreign public accounting firms have found that to retain their multinational
clients, they have had to develop the capacity to provide services worldwide.
Although the roots of at least two of
The steps in accepting an audit engagement are (a) evaluating the integrity of
management, (b) assessing the auditors ability to meet GAAS and (c) preparing
an engagement letter.
Major auditing developments in the 20 th century (5 required) include the
A shift in emphasis to the determination of fairness of financial
Increased responsibility of t
Financial statements audits, operational audits, and compliance audits are
similar in that each type of audit involves accumulating and evaluating
evidence about information to ascertain and report on th
OVERVIEW OF AUDITING
I. Review Questions
1. One definition of auditing is that it is a systematic process by which a competent,
independent person objectively obtains and evaluates evidence regarding assertions
about economic actions and events
Refer to page 2, paragraph 3 of the textbook.
Refer to page 3, paragraph 2 of the textbook.
Refer to page 4, paragraph 2 of the textbook.
In an assurance engagement , a practitio