Week 1-1

Question 1

What is the big difference between the AICPA definition and the IFAC?

Answer 1

AICPA highlight the outcome (improved quality)
IFAC highlights the process (gathering evidence)

Question 2

What is the definition of an Audit?

Answer 2

Opinion by an independent auditor on whether financial statements are in all material aspects present fairly
in accordance with GAAP

Question 3

What is the difference between GAAP and GAAS?

Answer 3

GAAP guides how accounting is done, and GAAS guides how audits are conducted to verify the accuracy and reliability of financial statements.

Question 4

What are behavioral requirements?

Answer 4

Independence
Skepticism

Question 5

Exogenous audit demand

Answer 5

Demand by outside inntervention

Question 6

Endogenous audit demand

Answer 6

Demand arises within the economy

Question 7

Is independence necessary? Jamal and Sunder, 2011, AOS

Answer 7

Independent graders do not have a larger market share, and this is not valued. The fact that you are independent
grader doesn’t give you a premium in the market.

Question 8

Individualistic archetype

Answer 8

Based on instrumental reasoning that co-offending will provide or enhance an opportunity to deliver individual benefits

Question 9

Collectivistic

Answer 9

Based on strong organizational attachment and collective reasoning that co-offending offers organizational benefits

Question 10

Relatonal

Answer 10

Based on positive affective regard for another