Chapter 2 - Professional Standards

Question 1

Who creates the professional standards for public and non-public companies?

Answer 1

PCAOB & AICPA (Statement of Auditing Standards or SAS)

Question 2

Who regulates Auditing Firms?

Answer 2

Public-PCAOB; Non-Public - AICPA (through peer review firms)

Question 3

What are the Auditing Standards for Public Companies?

Answer 3

Auditing, Attestation, Quality Control, Independence, & Ethics

Question 4

Who licenses CPA & firms to practice public accounting?

Answer 4

The state boards license CPA’s and Firms to practice.

Question 5

What is the personal responsibility of the auditor?

Answer 5

Appropriate competence and capabilities to perform audit in accordance with standards, including maintaining professional skepticism and exercising professional judgment throughout the audit

Question 6

What is the auditors responsibility for detection of fraud?

Answer 6

Reasonable Assurance to satisfy this requirement must exercise due professional care in gathering sufficient evidence.

Question 7

Are auditors responsible to detect non-compliance with laws that do not directly impact financial reporting?

Answer 7

No, but If information comes to the auditor’s attention, apply audit procedures directed at determining whether noncompliance has occurred. An audit does not provide assurance that noncompliance with these laws will be detected.