Professional Documents
Culture Documents
Chapter22
The
TheAudit
Audit
Standards’
Standards’Setting
Setting
Process
Process
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The legal right to perform audits is granted
to CPA firms by regulation in each state.
National firms
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Accounting and bookkeeping services
Tax services
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Three main factors influence the organizational
structure of all firms:
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Proprietorship
General Partnership
General Corporation
Professional Corporation
Limited Liability Company
Limited Liability Partnership
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Average Experience
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2
Understand the role of the Public Company
Accounting Oversight Board and the effects of
the Sarbanes-Oxley Act on the CPA profession.
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This Act is considered by many observers to
be the most important legislation affecting
the auditing profession since the 1930s.
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SEC
PCAOB
(Public Company
Accounting
Oversight Board)
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3
Summarize the role of the Securities and Exchange
Commission in accounting and auditing.
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The purpose is to assist in providing investors
with reliable information upon which to make
investment decisions
The Securities Act of 1933
The Securities Exchange Act of 1934
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Form S-1
Form 8-K
Form 10-K
Form 10-Q
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4
Describe the key functions
performed by the AICPA.
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Performs the following services for CPAs:
Sets professional requirements
Conducts research
Publishes materials related to services
performed
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1. Auditing standards
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The CPA examination
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5
Understand the role of
international auditing standards
and their relation to U.S.
auditing standards
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Classification of Statements on Auditing Standards
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IFAC is the worldwide organization
for the accountancy profession.
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6
Use U.S. auditing standards as a basis for
further study
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General Standards
2-29
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Standards of Field Work
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Standards of Reporting
3. Adequacy of disclosures
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PCAOB ASB
Public Private
company company
audits audits
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The 10 generally accepted auditing standards
are too general to provide meaningful guidance.
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7
Identify quality control standards and practices
within the accounting profession.
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Leadership responsibilities for quality
Relevant ethical requirements
Acceptance and continuation of clients
and engagements
Human resources
Engagement performance
Monitoring
2-35
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Auditing Continuing
standards education
CPA
requirements
examination
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