Audit Notes
Audit Test 1 notes
Board of Directors hires auditors
Controller pays the auditors
Audit Report is the auditor product
If you find illegal can't tell public but must notify the management and if they don't do anything then maybe report
-can then resign and report
ALL auditors are reviewed every 3 years
AICPA
-makes standards for private companies ?
PCAOB
-sets standards (the SEC sets standard)
-Quasi private public company
-legal authority to set standards
Assurance is a broader aspect of Audit
-Many components and could be a couple things like 1. Review ( cheaper quicker)
2. Agreed upon procedures (specific procedure)
Examples of assurance services
1. performance view
2. Systrust
3. WebTrust
No longer used
Auditing= a systematic process of objectivity obtaining and evaluating evidence regarding assertions about economic actions n events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users
Establish criteria- gasp
financial stmts- assertions the company is making
1. footnotes
2. stmt of cash flows
3. income statement
4. balance sheet
Objective outsider = auditor
-obtains and evaluates evidence
GAAP
-fasb - apb -arb -gasb aicpa -acsec -eitf - sec
Assumptions
1st Existence (balances) or Occurrences (transactions)
-is it really there
2nd Completeness (balance/transactions) and cut off
-are those all the components?
3rd Rights and obligations
-is it really yours
4th Valuation or allocation(balances) accuracy (trans)
Was it copied over correctly? is it the right amount?
Presentation and disclosure
(classification and understandability with aicpa)
Valuation did you use the RIGHT NUMBER /VALUE CORRECTLY?
Accuracy Did you actually WRITE THE RIGHT Number?
Existence : did you just make it up or actually take on your transcripts
Completeness are all the classes you took in
Board of Directors hires auditors
Controller pays the auditors
Audit Report is the auditor product
If you find illegal can't tell public but must notify the management and if they don't do anything then maybe report
-can then resign and report
ALL auditors are reviewed every 3 years
AICPA
-makes standards for private companies ?
PCAOB
-sets standards (the SEC sets standard)
-Quasi private public company
-legal authority to set standards
Assurance is a broader aspect of Audit
-Many components and could be a couple things like 1. Review ( cheaper quicker)
2. Agreed upon procedures (specific procedure)
Examples of assurance services
1. performance view
2. Systrust
3. WebTrust
No longer used
Auditing= a systematic process of objectivity obtaining and evaluating evidence regarding assertions about economic actions n events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users
Establish criteria- gasp
financial stmts- assertions the company is making
1. footnotes
2. stmt of cash flows
3. income statement
4. balance sheet
Objective outsider = auditor
-obtains and evaluates evidence
GAAP
-fasb - apb -arb -gasb aicpa -acsec -eitf - sec
Assumptions
1st Existence (balances) or Occurrences (transactions)
-is it really there
2nd Completeness (balance/transactions) and cut off
-are those all the components?
3rd Rights and obligations
-is it really yours
4th Valuation or allocation(balances) accuracy (trans)
Was it copied over correctly? is it the right amount?
Presentation and disclosure
(classification and understandability with aicpa)
Valuation did you use the RIGHT NUMBER /VALUE CORRECTLY?
Accuracy Did you actually WRITE THE RIGHT Number?
Existence : did you just make it up or actually take on your transcripts
Completeness are all the classes you took in