GAAS

Question 1

There are 10 GAAS. They are divided into 3 categories. What are the 3 categories?

Answer 1

1. General standards
2. Standards of field work
3. Standards of reporting

Question 2

Auditing standards are related what 2 things?

Answer 2

The quality of the CPA’s work and to the objectives of the audit. They are concerned with the auditor’s professional qualities and judgment exercised in the performance of the audit.

Question 3

What are the 3 general standards?

Answer 3

1. The auditor must have adequate technical training and proficiency to perform the audit.
2. The auditor must maintain independence in mental attitude in all matters relating to the audit
3. The auditor must exercise due professional care in the performance of the audit and the preparation of the report. The auditor must perform due diligence in the audit and report any misleading stmts in the report.

Question 4

What are the 3 Standards of Fieldwork?

Answer 4

1. The auditor must adequately plan the work and must properly supervise any assistants
2. The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the FS whether due to error or fraud, and to design the nature, timing and extent of further audit procedures
3. The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the FS under audit.

Question 5

What are the 4 Standards of reporting?

Answer 5

1. The auditor must state in the auditor’s report whether the FS are presented in accordance with GAAP
2. The auditor must identify in the auditor’s report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period
3. When the auditor determines that informative disclosures are not reasonable adequate, the auditor must so state in the auditor’s report
4. The auditor must either express an opinion regarding the FS taken as a whole or state that an opinion cannot be expressed in the auditor’s report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the report. In all cases, where an auditor’s name is associated with FS, the auditor should clearly indicate the character of the auditor’s work, if any, and the degree of responsibility the auditor is taking in the auditor’s report.