Auditing:

Auditing:-AEE - Report- DIC A: auditing E: evaluation E: evidence

Information and established critieria

Evidence: any information you used for your job. In accordance with the criteria, Needs to be balance

Competent independent person: Competent: no biasJudgment need to be professional

Accounting: three letters R,C,S: recording, classifying, summarizing

Auditing important factor to reduce risk: Information risk:

Causes of information risk and how to reduce by auditing:Remoteness of informationBiasesVoluminous

Reducing information risk:Verifies information: Sharing information risk with management:

Other services auditor can perform:Tax auditors

Assurance services: independent services, professionalEx: tax auditors, donoe by cpa lawyer,

Attestation services:Five categories:1. Audit: 2. Internal control over financial reporting3. Review 4. Information technology5. OthersGreen intiatives: the way to produce data

Other assurance services examples: Compliance with royalty agreementsISO 9000 certifications: all about the quality of things for the product

Three types of auditOperational: light bulb that broke. How many people to take to screw the bulb. Doing so many outputs but in a many ways.Example:Compliance: Financial statements

Audit financial statements: GAAP. GAS

Basic types of audit:Financial statement audit

Types of auditors:CPAGAOAIRSInternal auditors

Chapter 2

Two types of auditEngagementQuality review

SEC oversee public companies or private sector

CPA other services: advisory services and tax

Forensic accounting: investigated accounting/auditing

National firm: just in US

Regional: there are parts in diff. states

4 firms: deloitte, e&Y, pricewaterhouse, kpmg

Three main factors: structure of cpa firmsLLC: limited personal liabilityLLP: less protection

Role SEC:

SEC 2 types of regulationgSEC1933 and 19341933: inclusive law that penalize the CPA.1934: have to show proof the burden the cpa

Form:Form 10-K: annuallyForm 10-Q: quarterlyAK Form

Services of CPA: Compliation and reviewsTaxConsultationBookkeeping

AICPA:Establish the rule and standards for CPA

ISA: applicable entities outside usUS GAAP:

10 auditing standards:1. Auditing training and proficiency (T)2. Independence in mental attitude (I)3. Due professional care

4. Proper planning and supervision5. Understanding of the entity6. Sufficient appropriate evidence

1. Statements prepared in accordance with GAAP2. circumstances when gaap is allowed3. adequacy of disclosures4. expression of opinion on financial statements

CPAs have very high standard