Components of Audit Quality
An attitude that includes a questioning mind, being alert to conditions which mayf indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence.
Professional Skepticism
The national professional organization of Certified Public Accountants in the United States, with more than 428,000 members in 130 countries.
AICPA
In their publication, the ICPAS argues that stricter observation of ______ at the individual level would increase audit quality.
Technical and ethical standards.
Why is finding and retaining talent a challenge to modern audits?
The COVID-19 Pandemic, Global Workforce Shortages, Etc.
How can auditors address increased M&A activity?
Further specialization among professionals within the auditing field.
In the performance of any professional service, an auditor must maintain ______, shall be free of conflicts of interest, and shall not knowingly misrepresent facts or subordinate his or her judgment to others.
Integrity and Objectivity
A nonprofit corporation created by the Sarbanes–Oxley Act of 2002 to oversee the audits of US-listed public companies.
PCAOB
In their publication, the ICPAS argues that increasing the ______ of standards would reduce the quantity and materiality of errors.
Comprehensiveness/Scope
A business transactions in which the ownership of companies, business organizations, or their operating units are transferred to or consolidated with another company or business organization.
Merger and Acquisition
How can audit firms stem the difficulty of finding and retaining good talent?
Employing new technologies to do more of the heavy lifting.
Those activities performed by the auditor to detect material misstatement or fraud at the assertion level.
Substantive Procedures
A private standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles within the United States.
FASB
The process of focusing one's occupational concentration on a specific area of expertise.
Specialization
Define ESG
Environmental, social, and corporate governance factors important to investors.
Why should auditors expand the scope of their audits to cover key ESG factors?
ESG factors are becoming increasingly important to investors and stakeholders.
Define independece of fact and independence of apperance.
Independence in appearance is how independent the auditor appears to outsiders, such as users of financial statements. Independence of fact refers to whether the auditor has maintained an attitude of independence throughout the engagement.
An independent agency of the United States federal government, to enforce laws against market manipulation.
SEC
In their publication, the ICPAS argues that expanding the ______ of peer reviews will increase the transparency and reliability of audit services.
Scope and Accessibility
How have new technological innovations challenged auditors?
The use of new technologies, particularly AI, lack clear auditing guidelines and standards. In addition, new technology creates the risk of auditors becoming over-reliant on software.
How should the profession address ever increasing technological innovations?
Expanding the professions core competencies and/or the publication of comprehensive guidelines surrounding the use and audit of new AI and data visualization programs.