AUD 1 - Professional Standards

Question 1

Define the professional standards and guidelines for audits as they relate to standard/guideline, standard-setting body, and applies to?

Answer 1

1) Statements on Auditing Standards (SAS) -> AICPA Auditing Standards Board -> Nonissuers (private company)
2) Public Company Accounting Oversight Board Auditing Standards (PCAOB AS) -> Public Company Accounting Oversight Board -> Issuers (public company)
3) Generally Accepted Government Auditing Standards (GAGAS) -> Governmental Accountability Office -> Government (entities that receive government funds)

Question 2

Define the professional standards and guidelines for other engagements as they relate to standard/guideline, standard-setting body, and applies to?

Answer 2

1) Statements on Standards for Attestation Engagements (SSAE) -> AICPA -> Examination, a review, or agreed-upon procedures
2) Statements on Standards for Accounting and Review Services (SSARS) -> AICPA Accounting and Review Services Committee -> Unaudited non-issuers (private company) (compilation)

Question 3

What is the most authoritative audit guidance?

Answer 3

SAS (Nonissuers) and PCAOB AS (Issuers)

Question 4

Define generally accepted auditing standards?

Answer 4

Measures of the quality of the auditor’s performance

Question 5

Define generally accepted accounting principles?

Answer 5

Encompasses the conventions, rules, and procedures necessary to define U.S. accepted accounting practice at a particular time

Question 6

Can auditor depart from using Statements on Auditing Standards (SASs)?

Answer 6

Auditors are generally required to follow the guidance provided by the Standards, but they can depart if they justify any departures.