Wiley CPAexcel Exam Review 2015 Focus Notes: Auditing and Attestation

Module 1

Professional Responsibilities

Financial Statements, an Audit and Audited Financial Statements

Principles Underlying an Audit

• Purpose of audit—Provide an opinion.
• Premise of audit—Management has responsibility for preparing financial statements and providing auditor with all needed information.
• Personal responsibilities of auditor—Competence, follow ethical requirements, maintain professional skepticism.
• Auditor actions in audit—Provide procedures to obtain reasonable assurance about whether financial statements are free from material misstatements.
• Reporting results of an audit—Written report with an opinion, or a statement that an opinion cannot be obtained.

Auditing Standard Requirement Categories

• Unconditional requirement—The auditor must comply with the requirement in all cases in which the circumstances exist. SAS use the words must or is required to indicate an unconditional requirement.
• Presumptively mandatory requirement—Similarly, the auditor must comply with the requirement, but, in rare circumstances, the auditor may depart from such a requirement. In such circumstances, the auditor documents the departure, the justification for the departure, and how the alternative procedures performed in the circumstances were sufficient. SAS use the word should ...