Auditing Hw Week 1

2-7

Who is responsible for establishing auditing standards for the audits of public companies? For private companies? Explain.

Ans. PCAOB sets the auditing standards for publicly trading companies by establishing auditing and quality controls standards and performing inspections of registered firms. The AICPA is responsible for setting auditing standards for private companies. The four major areas in which the AICPA has authority to set standards and make rules are as follows: through auditing standards, compilation and review standards, other attestations standards and code of professional conduct.

2-10

Generally accepted auditing standards have been criticized by different sources for failing to provide useful guidelines for conducting an audit. The critics believe the standards should be more specific to enable practitioners to improve the quality of their performance. As the standards are now stated, some critics believe that they provide little more than an excuse to conduct inadequate audits. Evaluate this criticism of the 10 generally accepted auditing standards.

Ans. I believe that the generally accepted auditing standards should provide more clearly defined guidelines there is almost no specific audit procedures required by the standards. These include no specific requirements for audit decisions such as determining sample size, screening sample items from the population for testing or evaluating results amongst other things.

2-16

a. The first general standard, which states in part that the audit must be performed by a person or persons having adequate technical training, requires that an auditor have? Ans. (1) education and experience in the field of auditing.

b. Which of the following best describes what is meant by generally accepted auditing standards? Ans. (2) Measures of the quality of the auditor’s performance.

c. The general group of the generally accepted auditing standards includes a requirement that? Ans. (3) due professional...