1. The document outlines standards for auditing financial statements including standards for qualifications of auditors, independence, due care, planning audits, evaluating internal controls, obtaining evidence, and reporting.
2. It states that auditors must have adequate training and experience. They must also maintain independence and exercise due professional care in performing the audit and preparing the report.
3. The standards of fieldwork require adequate planning of the audit. Auditors must also properly evaluate internal controls and obtain sufficient evidence through inspection, observation, inquiries and confirmations to issue an opinion on the financial statements.
1. The document outlines standards for auditing financial statements including standards for qualifications of auditors, independence, due care, planning audits, evaluating internal controls, obtaining evidence, and reporting.
2. It states that auditors must have adequate training and experience. They must also maintain independence and exercise due professional care in performing the audit and preparing the report.
3. The standards of fieldwork require adequate planning of the audit. Auditors must also properly evaluate internal controls and obtain sufficient evidence through inspection, observation, inquiries and confirmations to issue an opinion on the financial statements.
1. The document outlines standards for auditing financial statements including standards for qualifications of auditors, independence, due care, planning audits, evaluating internal controls, obtaining evidence, and reporting.
2. It states that auditors must have adequate training and experience. They must also maintain independence and exercise due professional care in performing the audit and preparing the report.
3. The standards of fieldwork require adequate planning of the audit. Auditors must also properly evaluate internal controls and obtain sufficient evidence through inspection, observation, inquiries and confirmations to issue an opinion on the financial statements.
1. The examination is to be performed by a person or pesons having adequate technical
training and proficiency as an auditor.( Comment: The auditor must have the education in accounting, the practical experience in auditing, and knowledge of the particular industry being audited.) 2. In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors.( Comment: This standard is often called the cornerstone of the profession since it is necessary to add credibility to what we do. It is defined as independence in fact and appearance. The auditor is judicially impartial. Various independence standards are discussed in depth in the Ethics and Professional Responsibilities section of this lecture.) 3. Due professional care is to be exercised in the performance of the examination and the preparation of the report.( Comment: Often called the "average auditor" concept. The auditor should do what the average auditor would do and never less, including review of work performed by assistants and maintaining an attitude of professional skepticism. Evidence of "due professional care" is indicated by critical management reviews of work performed at every level of supervision.) Standards of fieldwork: 4. The work is to be adequately planned and assistants, if any, should be properly supervised.( Comment: Audit programs are designed to enumerate appropriate action, and all work of staff auditors should be reviewed by a qualified auditor.) 5. There is to be a proper study and evaluation in the existing internal control as a basis for reliance thereon and for the determination of the resultant extent of the test to which auditing procedures are to be restricted.( Comment: Appropriate internal controls provide the auditor with confidence that material misstatements will be prevented, or detected and corrected, on a timely basis.) 6. 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.( Comment: All specific audit work is performed in order to gather evidence.) Standards of reporting: 7. The report shall state whether the financial statements are in presented in accordance with generally accepted principles of accounting.( Comment: Explicit statement in auditor's report.) 8. The report shall identify those circumstances in which principles have not been consistently observed in the current period in relation to the preceding period. (Comment:Explicit statement in auditor's report.) 9. Informative disclosures is to be regarded as reasonably adequate unless otherwise stated in the report.( Comment: Implicit in auditor's report.) 10. 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. In all cases, where an auditors name is associated with financial statements, the report should contain a clear-cut indication of the character of the auditors examination, if any , and the degree of responsibility he is taking.( Comment: Explicit statement in auditor's report.)