Publicado em 4 de fev de 2014
Principles of Auditing: Professor Helen Brown Liburd
Lecture 2
Professional Standards
January 29th, 2014
Please visit our website at http://raw.rutgers.edu
TIME STAMPS (for quick navigation)
2:50 Auditing Standards for Public and Nonpublic Entities
5:54 Overview of GAAS and Principles
8:54 Generally Accepted Auditing Standards
12:40 Components of GAAS
14:06 Responsibilities Principle
23:33 Auditor Independence
27:32 Covered Members
32:01 Prohibited Financial Relationships
35:04 Prohibited Services
36:26 Effect of Family Relationships
42:51 Effect of Actual or Threatened Litigation
43:34 SEC & PCAOB Independence Requirements
45:02 Effect of Actual or Threatened Litigation (Revisited)
56:07 Other Requirements
1:04:17 Other Rules of Conduct (Integrity, Objectivity, Compliance)
1:06:05 Performance Principle
1:09:11 Reporting Principle
1:10:02 Major Items in Auditor's Report
1:10:45 Quality Control Standards
1:13:56 Elements of Quality Control
1:14:45 PCAOB
There are different auditing standards for public and nonpublic entities. AICPA Statements on Auditing Standards says that for the audits of public entities, standards issued by the auditing standards board prior to April 2003 not amended or superseded by PCAOB standards (interim standards). For audits of nonpublic entities, all current standards issued by Auditing Standards Board (ASB) apply. The PCAOB Auditing Standards does not deal with the audits of nonpublic entities. For audits of public entities, they state that all current standards issued by the PCAOB apply.
Generally accepted auditing standards identify the necessary qualifications and characteristics of auditors and guide the conduct of the audit. The purpose of GAAS is to achieve the following objectives of an audit examination: (1) to obtain reasonable assurance about whether financial statements are free of material misstatement and (2) to report on the financial statements and communicate in accordance with auditor's findings.
The responsibilities principle states that an auditor must have competence and capabilities (experience and expertise), independence (independence in fact vs. independence in appearance and financial/managerial relationships), due care (level of performance by reasonable auditor in similar circumstances), and professional skepticism and judgment (skepticism is appropriate for questioning and critical assessment of evidence and judgment is application of training, knowledge, and experience in making informed decisions during the audit).
The value of auditing depends heavily on the public's perception of the independence of auditors. A member in public practice shall be independent in the performance of professional services. All covered members are prohibited from owning any direct investments in audit clients. Covered members are individuals on the attest engagement team, individuals in a position to influence the attest engagement, a partner or manager who provides non attest services to the attest client beginning once he or she provides 10 hours of non attest services, a partner in the office in which the lead attest engagement partner primarily practices in connection with the attest engagement, the firm, including the firm's employee benefit plan, and an entity whose operating, financial, or accounting policies can be controlled by any of the individuals or entities described above or by two or more such individuals or entities if they act together.
There are several prohibited financial relationships. Direct prohibited financial relationships occur when a covered member has a financial interest in an attest client, such as ownership of stock or a loan to or from the client. A material indirect relationship occurs when a covered member has a financial interest in an entity that is associated with an attest client, for example an investment in a mutual fund that owns the client's stock. An exception to this is certain types of personal loans from financial institutions who are clients are permitted.
The independence of a CPA is impaired if the CPA performs a managerial or other significant role for a client's organization during the time period covered by an attest engagement. A firm's independence will be considered to be impaired with respect to a client if a partner or professional employee leaves the firm and is subsequently employed by a client in a key position.
The Sarbanes-Oxley Act and several SEC provisions address auditor independence. Prohibited services include bookkeeping and other accounting services, financial information systems design and implementation, appraisal or valuation services, actuarial services, internal audit outsourcing, management of human resource functions, broker, dealer, or investment adviser or investment banker services, legal and expert services unrelated to the audit, and any other service that the PCAOB determines by regulation is impermissible.
Lecture 2
Professional Standards
January 29th, 2014
Please visit our website at http://raw.rutgers.edu
TIME STAMPS (for quick navigation)
2:50 Auditing Standards for Public and Nonpublic Entities
5:54 Overview of GAAS and Principles
8:54 Generally Accepted Auditing Standards
12:40 Components of GAAS
14:06 Responsibilities Principle
23:33 Auditor Independence
27:32 Covered Members
32:01 Prohibited Financial Relationships
35:04 Prohibited Services
36:26 Effect of Family Relationships
42:51 Effect of Actual or Threatened Litigation
43:34 SEC & PCAOB Independence Requirements
45:02 Effect of Actual or Threatened Litigation (Revisited)
56:07 Other Requirements
1:04:17 Other Rules of Conduct (Integrity, Objectivity, Compliance)
1:06:05 Performance Principle
1:09:11 Reporting Principle
1:10:02 Major Items in Auditor's Report
1:10:45 Quality Control Standards
1:13:56 Elements of Quality Control
1:14:45 PCAOB
There are different auditing standards for public and nonpublic entities. AICPA Statements on Auditing Standards says that for the audits of public entities, standards issued by the auditing standards board prior to April 2003 not amended or superseded by PCAOB standards (interim standards). For audits of nonpublic entities, all current standards issued by Auditing Standards Board (ASB) apply. The PCAOB Auditing Standards does not deal with the audits of nonpublic entities. For audits of public entities, they state that all current standards issued by the PCAOB apply.
Generally accepted auditing standards identify the necessary qualifications and characteristics of auditors and guide the conduct of the audit. The purpose of GAAS is to achieve the following objectives of an audit examination: (1) to obtain reasonable assurance about whether financial statements are free of material misstatement and (2) to report on the financial statements and communicate in accordance with auditor's findings.
The responsibilities principle states that an auditor must have competence and capabilities (experience and expertise), independence (independence in fact vs. independence in appearance and financial/managerial relationships), due care (level of performance by reasonable auditor in similar circumstances), and professional skepticism and judgment (skepticism is appropriate for questioning and critical assessment of evidence and judgment is application of training, knowledge, and experience in making informed decisions during the audit).
The value of auditing depends heavily on the public's perception of the independence of auditors. A member in public practice shall be independent in the performance of professional services. All covered members are prohibited from owning any direct investments in audit clients. Covered members are individuals on the attest engagement team, individuals in a position to influence the attest engagement, a partner or manager who provides non attest services to the attest client beginning once he or she provides 10 hours of non attest services, a partner in the office in which the lead attest engagement partner primarily practices in connection with the attest engagement, the firm, including the firm's employee benefit plan, and an entity whose operating, financial, or accounting policies can be controlled by any of the individuals or entities described above or by two or more such individuals or entities if they act together.
There are several prohibited financial relationships. Direct prohibited financial relationships occur when a covered member has a financial interest in an attest client, such as ownership of stock or a loan to or from the client. A material indirect relationship occurs when a covered member has a financial interest in an entity that is associated with an attest client, for example an investment in a mutual fund that owns the client's stock. An exception to this is certain types of personal loans from financial institutions who are clients are permitted.
The independence of a CPA is impaired if the CPA performs a managerial or other significant role for a client's organization during the time period covered by an attest engagement. A firm's independence will be considered to be impaired with respect to a client if a partner or professional employee leaves the firm and is subsequently employed by a client in a key position.
The Sarbanes-Oxley Act and several SEC provisions address auditor independence. Prohibited services include bookkeeping and other accounting services, financial information systems design and implementation, appraisal or valuation services, actuarial services, internal audit outsourcing, management of human resource functions, broker, dealer, or investment adviser or investment banker services, legal and expert services unrelated to the audit, and any other service that the PCAOB determines by regulation is impermissible.
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