GAAS and Principles

Question 1

OLD GAAS 10 standards (TID PIE GCDO)

-3 TID (personal- applies to auditor)
T - training
I - independence
D- due professional care

• D due professional care- auditor examines and collects evidence considered necessary to support an opinion on fincl statmnts
• “critically review judgement exercised at every level of supervision”

-3 PIE (field work std- obtng and eval of evidence)
P- plannig and supervision
I- internal control
E- Evidence

-4 GCDO (reporting std- communication of result)
G- GAAP
C- Consistency
D- Disclosure
O- Opinion

Answer 1

NEW 7 PRINCIPLES (around 4 primary themes)

PR-PR

P- Purpose/premise
R- Responsiblty
P- performance
R- reportng

Question 2

P- PURPOSE/PREMISE

PURPOSE OF AUDIT
To provide financl stmnt users with opinion of auditor whether fincl stmts are presented fairly with applicable reporting framework

PREMISE OF AUDIT
Managmnt has the respb for prep and fair presentation of fincl stmnt with applicable reporting frameork and provide auditor with all information

Answer 2

R - RESPONSBILITY

Auditors are responsible for having auditing competence, comply with ethical reqs, exercise prof judgement

Question 3

P- PERFORMANCE

1. obtains reasonable (not absolute) assurance
2. plans work, supervises, applies materiality level, assesses risk of material misstatement, obtains audit evidence
3. unable to obtain 1 due to limitations arising from nature of financial reporting, audit procedures and bal btw benefit and cost (audit in limited time)

Answer 3

R- REPORTING

auditor expresses an opinion (fair representation and reporting framewrk) or states that an opinion cannot be expressed