External Internal

Auditors Auditors

Government Forensic
Auditors Auditros
Types of Services
Audit Services

Attest Services

Assurance Services

Non-audit Services
 Audit Services
Internal Control Audits

Compliance Audits

Operational Audits

Forensic Audits
 Attest Services

Reporting on the quantity and

nature of inventory for a company
to get a bank loan
 Assurance Services

Specific type of assurance service

Non-audit Services
Tax Preparation

Tax Planning

Management Advisory

Compilations

Reviews
CPA
 • Deloitte
• EY
Big 4
• PwC
• KPMG

• BDO
Mid-Tier
• Grant Thornton
Regional
Local
 Partner

Manager

Senior/In-Charge

Staff / Associate
 Partner Duties
Agree on the scope and the service to be provided

Oversee the planning process and that the audit is conducted in accordance with
auditing standards.

Assemble an audit team appropriate to the task

Supervise and review the audit team and their working papers

Sign the audit after concluding on adequacy of audit evidence

 Manager
Plan audit including the team members schedule

Oversee preparation and approve of the audit program

Review the financial statements, working papers, and audit report

Make recommendations to partners and oversee work of senior staff

Invoice and collect on payment for services

Track and inform about auditing or accounting problems found

 Senior/In-Charge
Help develop the audit plan

Make budgets

Delegate tasks to associates and direct the day to day procedures of the
audit

Review work of associates

Report to manager about any problems

 Staff / Associate

Perform audit procedures they are assigned

Make documentation of work completed

Report any problems to the senior

 Enron

Arthur Anderson

Tyco

WorldCom

Lehman Brothers
 Government Regulations
• Passed in 2002
Sarbanes-Oxley • Regulation of
Public Company audit profession Dodd-Frank Wall
Accounting • Created the Street Reform • Passed in 2010
Reform and Public Company and Consumer
Investor Accounting Protection Act
Protection Act Oversight Board
(PCAOB)
Provide Reasonable Assurance
that the financial statements are
materially free of misstatement,
Reasonable assurance in not
whether caused by
absolute assurance that material
• Error misstatements are detected
• Fraud or
• Illegal acts
Management is primarily responsible for
maintaining effective internal control and for
ensuring the fairness of their financial
statements.
 SEC AICPA PCAOB
Securities and American Institute Public Company
Exchange of Certified Public Accounting Oversite
Commission Accountants Board

FASB ASB
Financial Accounting Auditing Standards
Standards Board Board
 Securities and Exchange
Commission

Oversees Formulation of Private sector audit

Oversees formulation of
auditing standards for standard setting for
accounting principles
publicly traded companies nonpublic companies

Public Company American Institute of

Financial Accounting
Accounting Oversight Certified Public
Standards Board
Board Accountants

PCAOB issues auditing FASB issues accounting

standards for audits of Principles for use by Auditing Standards Board
public companies preparers

ASB issues auditing

Entities prepare financial standards for audits of
statements in accordance nonpublic companies also
with accounting principles issues attestation and
assurance standards

Independent auditor
follows auditing standards
to audit financial
statements for compliance
with accounting principles

Audit Financial Statements

 IASB IAASB
International International Auditing
Accounting Standards and Assurance
Board Standards Board
• Help make financial statement audits that
are conducted in a consistent and thorough
manner.
• They also serve as a criteria for evaluating
the quality of the auditor’s performance.
 ASB
Nonpublic Company Audits
Auditing Standards Board

PCAOB
Public Company Accounting Public Company Audits
Oversight Board

IAASB
International Auditing & Used in international jurisdictions
Assurance Standards Board
Purpose and premise of an audit

Responsibilities of the auditor

Performance of the audit

Reporting
 Auditing Standards
PCAOB IAASB
ASB
Public Company International Auditing
Auditing Standards
Accounting Oversight and Assurance
Board
Board Standards Board

Statement on International
Auditing Standards
Auditing Standards Standards on
(AS)
(SAS) Auditing (ISA)
 Two numbering categories
AU SAS
For Auditing Standards Chronological according to
Also organized by topic when standard was issued

https://www.aicpa.org/research/standards/auditattest/sas.html
The PCAOB reorganized auditing standards into these
categories
Category Topical Content
AS 1000–1300 General Auditing Standards
AS 2100-2900 Audit Procedures
AS 3100-3300 Auditor Reporting
Matters Relating to Filings Under Federal
AS 4100
Securities Laws
AS 6100 Other Matters Associated with Audits

https://pcaobus.org/Standards/Auditing/Pages/default.aspx
Has 36 individual standards covering the full range of
auditing topics, but there is less structure to the
organization.
https://www.iaasb.org/clarity-center/clarified-standards