Indeminification
Part
1
INTRODUCTION TO ASSURANCE AND FINANCIAL STATEMENT AUDITING
1
An Introduction to Assurance and Financial Statement Auditing
2
The Financial Statement Auditing Environment
1
CHAPTER 1
LEARNING OBJECTIVES
Upon completion of this chapter you will [1] Understand why studying auditing can be valuable to you and why it is different from studying accounting. [2] Be able to explain why there is a demand for auditing and assurance. [3] Understand intuitively the demand for auditing and the desired characteristics of auditors and audit services through an analogy to a house inspector and a house inspection service. [4] Understand the relationships among auditing, attestation, and assurance services. [5] Know the basic definition and three fundamental concepts of a financial statement audit. Understand why on most audit engagements an auditor tests only a sample of transactions that occurred. Be able to describe the basic financial statement auditing process and the phases in which an audit is carried out. Know what an audit report is and the nature of an unqualified report. Understand why auditing demands logic, reasoning, and resourcefulness.
[6]
[7]
[8] [9]
R E L E VA N T A C C O U N T I N G A N D AUDITING PRONOUNCEMENTS
AU 110, Responsibilities and Functions of the Independent Auditor AU 150, Generally Accepted Auditing Standards AU 311, Planning and Supervision AU 312, Audit Risk and Materiality in Conducting an Audit AU 314, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement AU 315, Communications between Predecessor and Successor Auditors AU 318, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained AU 326, Audit Evidence AU 508, Reports on Audited Financial Statements
An Introduction to Assurance and Financial Statement Auditing
A
s you will learn in this chapter, auditing consists of a set of practical conceptual tools that help
1
INTRODUCTION TO ASSURANCE AND FINANCIAL STATEMENT AUDITING
1
An Introduction to Assurance and Financial Statement Auditing
2
The Financial Statement Auditing Environment
1
CHAPTER 1
LEARNING OBJECTIVES
Upon completion of this chapter you will [1] Understand why studying auditing can be valuable to you and why it is different from studying accounting. [2] Be able to explain why there is a demand for auditing and assurance. [3] Understand intuitively the demand for auditing and the desired characteristics of auditors and audit services through an analogy to a house inspector and a house inspection service. [4] Understand the relationships among auditing, attestation, and assurance services. [5] Know the basic definition and three fundamental concepts of a financial statement audit. Understand why on most audit engagements an auditor tests only a sample of transactions that occurred. Be able to describe the basic financial statement auditing process and the phases in which an audit is carried out. Know what an audit report is and the nature of an unqualified report. Understand why auditing demands logic, reasoning, and resourcefulness.
[6]
[7]
[8] [9]
R E L E VA N T A C C O U N T I N G A N D AUDITING PRONOUNCEMENTS
AU 110, Responsibilities and Functions of the Independent Auditor AU 150, Generally Accepted Auditing Standards AU 311, Planning and Supervision AU 312, Audit Risk and Materiality in Conducting an Audit AU 314, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement AU 315, Communications between Predecessor and Successor Auditors AU 318, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained AU 326, Audit Evidence AU 508, Reports on Audited Financial Statements
An Introduction to Assurance and Financial Statement Auditing
A
s you will learn in this chapter, auditing consists of a set of practical conceptual tools that help