Premium Essay

Auditing

In: Business and Management

Submitted By pinkwhiteout101
Words 1134
Pages 5
Government regulated monopoly
GAAP
General Standards
1. Adequate training and proficiency
2. Independence in mental attitude
3. Due professional care
Standards of Field Work
Proper Planning and supervision
Understanding of the entity
Sufficient appropriate evidence
Standards of Reporting
Statements prepared in accordance with GAAP
Circumstances when GAAP not consistently followed
Adequacy of disclosures
Expression of opinion on financial statements
*Test*
Table 5.1 Definitions
And broad broad stuff
Can accept a gift from a client as long as its no more than “token” or the amount the firm gives you
You can indirectly own stock in an auditing client if its immaterial to your net worth
You cannot be paid in stock
Because we don’t see the audit as one event, its not a series of events even though that looks like it. Because once you have the client you usually have it for a good amount of time.
“The professional engagement period begins when the registered public accounting firm either signs an initial engagement letter (or other agreement to review or audit a client’s financial statements) or begins audit, review, or attest procedures whichever is earlier: and (B) the professional engagement period ends when the audit client or the registered public accounting firm notifies the commission that the client is no longer that firm’s audit client.
You might be able to write a contract that can say the audit engagement is only a year and you might get away with it for a year so you can own stock but then PCAOB will eventually catch you and change the rule.
Sarbanes Oxley Act and SEC Provisions
Prohibited Services
Bookkeeping and other accounting services
Financial information systems design and implementation
Appraisal or valuation services
Actuarial Services
Internal Audit Outsourcing
Management of human resource functions...

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