Essential terms-CH2

American Institute of Certified Public Accountants (AICPA)—a voluntary

organization of CPAs that sets professional requirements, conducts research, and
publishes materials relevant to accounting, auditing, advisory services, and taxes
Center for Audit Quality (CAQ)—a public policy organization with a mission to
foster confidence in the audit process and to make public company audits even more
reliable and relevant for investors
Generally accepted auditing standards(GAAS)—refers to AICPA auditing
standards
developed and issued in the form of Statements on Auditing Standards (SASs) and
codified in AU-C sections in the Codification of Auditing Standards
International Standards on Auditing(ISAs)—statements issued by the International
Auditing and Assurance Standards Board of the International Federation of
Accountants to promote international acceptance of auditing standards
Peer review—the review by CPAs of a CPA firm’s compliance with its quality
control system
Principles underlying an audit— framework helpful in understanding and
explaining an audit; provide a structure for the Codification of Statements on Auditing
Standards
Public Company Accounting Oversight Board (PCAOB)—board created by the
Sarbanes–Oxley Act; oversees auditors of public companies and broker-dealers,
including establishing auditing, attestation, and quality control standards and
performing inspections of registered accounting firms
Quality control—methods used by a CPA firm to ensure that the firm meets its
professional responsibilities to clients and others
Securities and Exchange Commission (SEC)—a federal agency that oversees the
orderly conduct of the securities markets; the SEC assists in providing investors in
public corporations with reliable information upon which to make investment
decisions
Statements on Auditing Standards (SASs)—pronouncements issued by the
Auditing Standards Board of the AICPA applicable to audits of entities other than
public issuers