Definitions
Systematic process of objectively obtaining and evaluating evidence regarding assertions made about economic activity to ascertain the correspondence between the assertions and established criteria, and communication the results to interested users.
Auditing
Regulatory body of the stock market
SEC
What is the broadest level of services?
Assurance
CPA: Certified Public Accountant
The audit contract is called an ______ letter
Engagement
Questioning and critical thinking mindset
Professional Skepticism
Which organization is authorized to establish auditing standards for public companies?
PCAOB
Attestation services require:
Report to external users
Top level owners of a CPA firm
partner
T/F: Planning an audit is an optional part of the audit process
False
What is the applicable financial reporting framework in the US?
GAAP
Organization that creates standard for non issuers
AICPA Auditing Standards Board
Best description of attest services:
1) Ensuring books/records are completely accurate
2) Gathering evidence to evaluate assertions
2) Gathering evidence to evaluate assertions
Who performs financial audits: external auditors or internal auditors?
External auditors
T/F: CPA firms need quality control at the firm level
True
Statements about financial statement balances such as completeness and valuation
Assertions
Auditing standards for non issuers
SAS: Statements on Auditing Standards
1) information or process
2) users who derive value from the services
3) an assurance service provider
Who is the primary users of audit services?
Public: investors, bank, stockholder, employees etc.
Public companies are required to have what type of audit?
Integrated Audit: Controls and Financial Statements
Level of information that is that is likely to influence decision making for the users of financial statements
Materiality
Standards for issuers
Auditing Standards
Internal audits designed to evaluate the effectiveness, economy and efficiency
Operational Audits
Internal Auditors can get what certification?
CIA: Certified Internal Auditor
How are results presented for an audit?
Written Report: opinion