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8 Cards in this Set
- Front
- Back
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What is the objective of the ordinary examination of financial statements?
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To express an opinion on reliability and fairness of management prepared financial statements by means of the auditor's report
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List the categories of Generally Accepted Auditing Standards (GAAS)
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1) General Standards
2) Standards of Fieldwork 3) Standards of Reporting |
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What are the GAAS General Standards?
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1) The audit must be performed by a person having adequate training and proficiency as an auditor
2) The auditor must maintain independence in mental attitude in all matters relating to the assignment 3) The auditor must exercise due professional care in the performance of the examination and the preparation of the report |
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What are the GAAS Standards of Fieldwork?
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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 to asses the risk of material misstatement of the financial statements 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 financial statements under audit |
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What are the GAAS Standards of Reporting?
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1) The auditor must state in the auditor's report whether the financial statements are 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 reasonably adequate, the auditor must so state in the auditor's report. 4) The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that such an opinion cannot be expressed in the auditors report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report. In all cases where the auditor's name is associated with the financial statements, 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. |
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What are the requirements of the Introductory Paragraph of an Unqualified Opinion?
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1) “We have audited”
2) List of client’s statements audited and dates covered 3) Financials statements are the responsibility of management 4) Auditor’s responsibility to express and opinion |
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What are the requirements of the Scope Paragraph of an Unqualified Opinion?
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1) The audit was conducted in accordance with US GAAS
2) GAAS requires that we plan and perform the audit to provide reasonable assurance that statements are free of material misstatement 3) Audit involves: a) Examining, on test basis, evidence supporting amounts & disclosures b) Assessment of accounting principles c) Assessment of significant estimates d) Evaluation of overall presentation 4) Audit provides a reasonable basis for opinion |
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What are the requirements of the Opinion Paragraph of an Unqualified Opinion?
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1) “In our opinion”
2) Statements (name them) are fairly presented in accordance with GAAP |
