Audit

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ACCT 401-01
Chapter 2: Professional Standards
Introduction
Self-regulated: the standards governing audits were established by members of the profession themselves Sarbanes-Oxley Acct of 2002
Created: Public Company Accounting Oversight Board (PCAOB) to provide external and independent oversight over the audits of public entities Responsible for registering public accounting firms, establishing standards for audit engagements, and inspecting the quality of audits conducted by public accounting firms ****Generally Accepted Auditing Standards (GAAS)****

AICPA’s Auditing Standards Board introduced Statements of Auditing Procedures (1939-1972)and Statement of Auditing Standards (1972-present): to provide guidance for the conduct of audits PCAOB issues auditing standards which are subject to approval by the SEC Taken together, the relevant pronouncements of the AICPA and PCAOB are collectively referred to as the generally accepted auditing standards (GAAS) 1. A pronouncement issued by the AICPA prior to April 2003 that has not been amended or suspended by the PCAOB (Interim Auditing Standards) 2. A pronouncement issued by the PCAOB that has been approved by the SEC (Auditing Standard) Auditing Procedures: the particular and specialized actions that auditors take to obtain evidence in a specific audit engagement Auditing Standards: quality guides to the audit that apply to all audits 3 categories of GAAS:

1. General Standards
2. Standards of Field Work
3. Standards of Reporting
****Fundamental Principle: Responsibility****
The fundamental principle of responsibility relates to the personal integrity and professional qualifications of an auditor Auditors are responsible for :
1. Having appropriate competence and capabilities to perform the audit 2. Complying with relevant ethical requirements
3. Maintaining professional skepticism and exercising professional judgment, through the planning and performance of the audit ****Fundamental Principle:...
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