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CPA Auditing Standards Explained

The document outlines the professional standards and competencies required for auditors, emphasizing the importance of continuing professional development, independence, and adherence to Generally Accepted Auditing Standards (GAAS). It highlights the necessity for auditors to possess adequate technical training and to exercise due care in their judgments. Additionally, it clarifies that while auditors must strive for quality, they are not expected to be infallible.

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frankdavempaniagua
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15 views2 pages

CPA Auditing Standards Explained

The document outlines the professional standards and competencies required for auditors, emphasizing the importance of continuing professional development, independence, and adherence to Generally Accepted Auditing Standards (GAAS). It highlights the necessity for auditors to possess adequate technical training and to exercise due care in their judgments. Additionally, it clarifies that while auditors must strive for quality, they are not expected to be infallible.

Uploaded by

frankdavempaniagua
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

THE PROFESSIONAL experience in

auditing.
STANDARDS ●​ Continuing
professional
STANDARDS Standards = Measures development
of quality in (CPD).
performance for ●​ Consulting
individuals and experts for
organizations (e.g., additional
auditors). Accounting technical
profession standards knowledge.
focus on: ●​ Coaching by
●​ CPA’s experienced
professional staff.
qualities. ●​ Industry and
●​ Judgment client research.
exercised by
CPAs in Competence ≠
professional Infallibility; auditors are
engagements. not expected to be
●​ CPA firm’s error-free.
quality control
policies and INDEPENDENCE ●​ Independence
procedures. in fact and
appearance is
GENERALLY ACCEPTED AUDITING required in all
STANDARDS (GAAS) AND PHILIPPINE audit matters.
STANDARDS ON AUDITING ●​ No direct
●​ The Board of Accountancy financial
established 10 GAAS to set the interest in the
required quality level for financial client, including
statement audits. immediate
●​ Philippine Standards on Auditing family members.
(PSAs) clarify the meaning of Direct financial interest:
these GAAS. Ownership of equity
●​ Auditing procedures are the shares, financial
methods used by auditors to meet instruments, or other
the quality standards set by GAAS. financial benefits. No
material indirect
financial interest, such
GENERAL STANDARDS OF AUDITING as investments through
mutual funds.
ADEQUATE Auditor must have
TECHNICAL professional DUE Due care ≠ Infallibility;
TRAINING AND competence through: PROFESSIONAL auditors are not liable
PROFICIENCY ●​ Education, CARE for errors of pure
training, and judgment. Key
practical requirements for due
care:
●​ Follow fieldwork
and reporting
standards.
●​ Critically review
audit work at
every
supervisory
level.
●​ Apply a
common degree
of skill expected
in the
profession.
●​ Exercise
professional
care and
skepticism, as a
reasonable
auditor would.

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