AUDITG1 - GAAS

Generally Accepted Auditing Standards (GAAS) and Philippine Standards on Auditing (PSA) should be looked upon by practitioners as:

• Ideals to work towards, but which are not achievable

• Maximum standards which denote excellent work.

• Minimum standards of performance which must be achieved on each audit engagement.

• Benchmark to be used on all audits, reviews, and compilations.

Which of the following best describes what is meant by Generally Accepted Auditing Standards?

• Pronouncements issued by the Auditing Standards and Practices Council.

• Procedure to be used to gather evidence to support financial statements.

• Rules acknowledged by the accounting profession because of their universal compliance

• Measures of the quality of the auditor’s performance

An auditor need not abide by an auditing standard if the auditor believes that

• The amount is immaterial

• The requirement of the standard is impractical to perform

• The requirement of the standard is impossible to perform

• Any of the three above is correct

A CPA should comply with applicable generally accepted auditing standards on every engagement

• Without exception

• Except in examinations that result in a qualified report

• Except in engagements where the CPA is associated with unaudited financial statements

• Except in examinations of interim financial statements

A CPA is most likely to refer to one or more of the three general auditing standards in determining

• The nature of the CPA’s auditing qualification

• The scope of the CPA’s auditing procedures

• Requirements for the review of internal control

• Whether the CPA should undertake an audit engagement

The general standards stress the importance of

• The personal qualities which the auditor should have

• Evidence accumulation

• Communicating the auditor’s finding to the reader

• All of the above

The Audit Standard which requires “adequate technical training and proficiency” is normally interpreted as requiring the auditor to have

• Formal education in auditing and accounting

• Adequate practical experience for the work being performed

• Continuing professional education

• All of the above

Which of the following is not required by the Generally Accepted Auditing Standards that states that due professional care is to be exercised in the performance of the audit?

• Observance of the standards of field work and reporting

• Critical review of the audit work performed at every level of supervision

• Degree of skill commonly possessed by others in the profession.

• Responsibility for losses because of errors of judgment

The first general standard requires that the audit of financial statements be performed by a person or persons having adequate technical training and

• Independence with respect to the financial statements and supplementary disclosures

• Exercising professional care as judged by peer reviewers.

• Proficiency as an auditor, which likely has been acquired from previous experience

• Objectivity as an auditor, as verified by proper supervision

Which of the following is mandatory if the auditor is to comply with generally accepted auditing standards?

• Possession by the auditor of adequate technical training

• Use of analytical review on audit engagements

• Use of statistical sampling whenever feasible on an audit engagement.

• Confirmation by the auditor of material accounts receivable balances.