Auditing Thoery Part 2

58問 • 2年前

問題一覧

Auditor's opinion must be based on an examination conducted in accordance with professional standards.

True

Failure to comply with professional standards exposes the auditor to risks such as loss of public respect or even assessment of legal damages.

True

Standards are established to measure the quantities of performance of individuals and organizations.

False

The _______ promulgated ten generally accepted auditing standards (GAAS) that establish required level of quality for performing financial statement audits.

Board of Accountancy

These standards must be followed by CPAs when auditing financial statements.

Generally Accepted Auditing Standards

_________ are issued to clarify the meaning of these ten GAAS. Auditing procedures are the means used by the auditors in attaining the quality required by the standards.

Philippine Standards on Auditing

GAAS represent measures of the quality of the auditor's performance.

True

These standards should be looked at as a minimum standard of performance that auditors should follow.

GAAS

How many GAAS are created?

Ten

GAAS are grouped into 3 Standards

General Standards, Fieldwork Standards, Reporting Standards

Coverage of General Standards (GAAS)

Technical training and proficiency, Independence, Professional care

Coverage of Fieldwork Standards (GAAS)

Planning, Internal control consideration, Evidential matter

Coverage of Reporting Standards (GAAS)

Generally Accepted Accounting Principles, Inconsistency, Disclosure, Opinion

The examination is to be performed by person or persons having adequate technical training and proficiency as an auditor.

General Standards (GAAS)

In all matters relating to an engagement, an independence in mental attitude is to be maintained by the auditor.

General Standards (GAAS)

Due professional care is to be exercised in the performance of the audit and in the preparation of the report.

General Standards (GAAS)

The work is to be adequately planned and assistants; if any, are to be properly supervised.

Standards of Fieldwork (GAAS)

There is to be a proper study and evaluation of existing internal control as a basis for reliance thereon and for the determination of the resultant extent of the tests to which auditing procedures are to be restricted.

Standards of Fieldwork (GAAS)

Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries and confirmations to afford a reasonable basis for an opinion regarding the financial statements under examination.

Standards of Fieldwork (GAAS)

The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles.

Standards of Reporting (GAAS)

The report shall identify those circumstances in which principles have not been consistently observed in the current period in relation to the preceding period.

Standards of Reporting (GAAS)

Informative disclosures are to be regarded as reasonably adequate unless otherwise stated in the report.

Standards of Reporting (GAAS)

The report shall either contain an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefore should be stated.

Standards of Reporting (GAAS)

The _________ has been given the task to promulgate auditing standards, practices and procedures which shall be generally accepted by the accounting profession in the Philippines.

Auditing and Assurance Standards Council

The AASC undertakes a review of the standards and practices statements issued by IAASB to determine if these can be adopted in the Philippines with or without changes,.

True

If the public is to rely on the professional CPAs' work, it is essential that appropriate controls are put in place to ensure that their work is consistently of high quality.

True

________ are policies and procedures adopted by CPAs to provide reasonable assurance of conforming with professional standards in performing audit and related services.

Quality controls

Under Philippine Standards on Quality Control (PSQC) 1, a firm has an obligation to establish a system of quality control designed to provide it with reasonable assurance that the firm and its personnel comply with professional standards and regulatory and legal requirements, and that the report issued by the firm are appropriate in the circumstances.

Fact

Engagement teams: Implement quality control procedures that are applicable to audit engagement.

True

Engagement Team: Provide the firm with irrelevant information to enabling the functioning of that part of the firm's system of quality control relating to independence.

False

Engagement teams are entitled to rely on the firm's systems unless information provided by the firm or other parties suggest otherwise.

True

____ states that audit firm should implement policies and procedures designed to ensure that all audits are conducted in accordance with PSAs.

PSA 220

The quality control policies and procedures adopted by audit firms vary depending on the firm's size and nature of its practice, cost benefit considerations and other factors.

True

The firm should establish policies and procedures designed to promote an internal culture based on recognition that quality is not essential in the performance of the engagements.

False

The firm should establish policies and procedures designed to provide it with reasonable assurance that the firm and its personnel comply with ethical requirements.

True

Ethical requirements, which include:

Integrity, Objectivity, Professional competence and due care, Confidentiality, Professional behavior

The network firms maintain independence when providing assurance services.

True

The engagement partner should form a conclusion. on compliance with independence requirements that apply to the audit engagement.

True

The engagement partner should obtain relevant information to identify circumstances and relationships that create threats to independence.

True

The engagement partner should evaluate information on identified breaches of the firm's independence policies and procedures to determine whether they create a threat to independence.

True

The engagement partner should not take appropriate safeguards to eliminate such threats or increase them to an acceptable level.

False

The engagement partner should document conclusions on independence and the basis for such conclusion.

True

The engagement partner should be satisfied that the engagement team collectively has the appropriate capabilities, competence and time to perform the audit engagement in accordance with professional standards, and regulatory and legal requirements.

True

The engagement partner should not take responsibility for the direction, supervision, review and overall performance of the audit engagement.

False

Assistants should be informed of their responsibilities, the nature of the entity's business, potential problems that may arise and the detailed approach to the performance of the engagement.

Direction

This involves monitoring the progress of the audit, resolving accounting and audit issues, and considering the level of consultation appropriate for the engagement.

Supervision

Work performed by assistants should be reviewed to consider whether the audit procedures, evidence and documentation are appropriate to support the conclusion reached.

Review

The firm should establish policies and procedures that encourage firm personnel to seek assistance from authoritative sources either within or outside the firm.

Consultation

The engagement partner should responsible for the engagement team undertaking inappropriate consultation on difficult and contentious matters;

False

Be satisfied that members of the engagement team have undertaken appropriate consultation during the course of the engagement, only within the engagement team and others.

False

The engagement partner should be satisfied that the nature and scope of, and conclusions resulting from such consultations are documented and agreed with the party consulted.

True

The engagement partner should determine that conclusions resulting from consultations are implemented.

False

This requires the engagement partner to determine that an engagement quality control reviewer has been appointed;

Engagement Quality Control Review

The firm should establish policies and procedures setting out the scope of quality control review, criteria for the eligibility of the reviewer, and documentation of the quality control review.

True

The firm's quality control policies and procedures should be communicated to its personnel in a manner that provides reasonable assurance that the policies and procedures are understood and implemented.

True

The government thru the Professional Regulatory Board of Accountancy (BOA) has required all CPA firms and individual CPAs in public practice to obtain a certificate of accreditation to practice public accountancy. Such certificate is valid for __ years and can be renewed after complying with the requirements of the Board of Accountancv.

Recognizing the importance of professional accountants' services to the society, the government has also taken steps to ensure that CPAs work to the highest standards which can reasonably be expected from them.

True

As a condition to the renewal of the certificate of accreditation to practice public accountancy, the Board requires individual CPAs and CPA firms to undergo a quantity control review to ensure that these CPAs comply with accounting and auditing standards and practices.

False

FAR Quizzers For Post Test And Term Examination

Mark Anthony Germono · 24問 · 1年前

FAR Quizzers For Post Test And Term Examination