ACCT 497 Lecture Notes - Lecture 3: Financial Statement
Document Summary
Statutory liability: three major statutes provide sources of statutory liability for auditors. Sarbanes-oxley act of 2002: creation of (pcaob, stricter independence rules, audits of internal controls, increased reporting responsibilities, most sweeping securities law since 1934. Auditing standards for public and nonpublic entities. Overview: gaas (generally accepted auditing standards) and principles. Standards of reporting: quality of public accounting firms" practices. Generally accepted auditing standards (gaas: identify necessary qualifications and characteristics of auditors and guide the conduct of the audit, purpose of gaas is to achieve the following objectives of an audit examination. Obtain reasonable assurance about whether financial statements are free of material misstatement. Report on the financial statements and communicate in accordance with auditor"s findings. Components of gaas: fundamental principles (guide general conduct of audits) 3 principles: pcaob auditing standards and asb statements on auditing standards (requirements supporting principles) Gaas 10 items: interpretive publications (guide application of gaas) General standards vs. principles: responsibilities: general standards.