The Public Company Accounting Oversight Board (PCAOB) is responsible for establishing auditing standards for audits of public companies. The ASB is responsible for establishing auditing standards for private companies. 2-10
The criticism of this statement according to the ten generally accepted auditing standards that the standards should provide useful guidelines for conducting an audit to improve practitioners’ quality of their performance. Based upon ten generally accepted auditing standards, the quality control system can provide only reasonable assurance, not a guarantee, that auditing standards followed with a professional judgment of their opinion. 2-16
a. The first general standard, which states in part, that a person must perform the audit or persons having adequate technical training, requires that an auditor have education and experience in the field of auditing. b. The measures of the quality of the auditor’s performance are by accepting the general standards of auditing. c. The general group of the generally accepted auditing standards includes a requirement of due professional care be exercised by the auditor. d. The criteria of audit plan and evidence gathering the general character of the three generally accepted auditing standards classified as standards of fieldwork.
a. The ethical implications of Rossi and Montgomery’s accepting the engagement is having adequate training and proficiency, due professional care, proper planning and supervision, sufficient understanding of the entity, its environment, and its internal control. Since Mobile Home Manufacturing Company decided to issue stock to the public and Rossi and Montgomery’s CPA firm never had a client to go public or might not had proper training of filling necessary paperwork for SEC should not accept the engagement. b. The auditor may face some problems when filing the SEC of the following: new securities registration statement submitted for...
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