大三上课件审计chapter0143

TheAssuranceServicesMarketChapter1LearningObjective1Describeauditing.NatureofAuditingAuditingistheaccumulationandevaluationofevidenceaboutinformationtodetermineandreportonthedegreeofcorrespondencebetweentheinformationandestablishedcriteria.Auditingshouldbedonebyacompetent,independentperson.InformationandEstablishedCriteriaTodoanaudit,theremustbeinformationinaverifiableformandsomestandards(criteria)bywhichtheauditorcanevaluatetheinformation.AccumulatingEvidenceandEvaluatingEvidenceEvidenceisanyinformationusedbytheauditortodeterminewhethertheinformationbeingauditedisstatedinaccordancewiththeestablishedcriteria.Competent,IndependentPersonTheauditormustbequalifiedtounderstandthecriteriausedandmustbecompetenttoknowthetypesandamountofevidencetoaccumulatetoreachtheproperconclusionaftertheevidencehasbeenexamined.Thecompetenceoftheindividualperformingtheauditisoflittlevalueifheorsheisbiasedintheaccumulationandevaluationofevidence.ReportingThefinalstageintheauditingprocessispreparingtheAuditReport,whichisthecommunicationoftheauditor’sfindingstousers.AuditofHistoricalFinancialStatementsExampleCPACompetent,independentpersonExaminesledgersandothersupportingrecordsAccumulatesandevaluatesevidenceDeterminescorrespondenceHistoricalfinancialstatementspreparedbyauditeeInformationGAAPEstablishedcriteriaAuditreportReportonresultsLearningObjective2Distinguishbetweenauditingandaccounting.DistinguishBetween

AuditingandAccountingAccountingistherecording,classifying,andsummarizingofeconomiceventsforthepurposeofprovidingfinancialinformationusedindecisionmaking.Auditingisdeterminingwhetherrecordedinformationproperlyreflectstheeconomiceventsthatoccurredduringtheaccountingperiod.LearningObjective3Explaintheimportanceofauditinginreducinginformationrisk.RateofInterest1.Riskfreeinterest.2.Businessriskforthecustomer.3.Informationrisk.EconomicDemand

forAuditingInformationriskreflectsthepossibilitythattheinformationuponwhichthebusinessriskdecisionwasmadewasinaccurate.Auditingcanhaveasignificanteffectoninformationrisk.LearningObjective4Listthecausesofinformationrisk,andexplainhowthisriskmaybereduced.CausesofInformationRiskRemotenessofinformationBiasesandmotivesoftheproviderVoluminousdataComplexexchangetransactionsHowtoReduceInformationRiskUserverifiesinformation.Usersharesinformationriskwithmanagement.Auditedfinancialstatementsareprovided.CapitalCoststoShrink:Elliott’sExampleAssumingacostofcapitalof13%,Elliottestimatesthisrateiscomposedofthefollowing:5.5%risk-freeinterestrate3.5%economicriskpremium(businessrisk)4.0%informationcost(informationrisk)LearningObjective5DescribeassuranceservicesanddistinguishauditservicesfromotherassuranceandnonassuranceservicesprovidedbyCPAs.AssuranceServicesAssuranceservicesareindependentprofessionalservicesthatimprovethequalityofinformationfordecisionmakers.AssuranceservicescanbeperformedbyCPAsorbyavarietyofotherprofessionals.AttestationServicesAnattestationserviceisatypeofassuranceserviceinwhichtheCPAfirmissuesareportaboutthereliabilityofanassertionthatistheresponsibilityofanotherparty.AttestationServices1.Auditofhistoricalfinancialstatements2.Effectivenessofinternalcontroloverfinancialreporting3.Reviewofhistoricalfinancialstatements4.Otherattestationservices4Categories:RelationshipsAmongAuditors,Client,andExternalUsersClientAuditorClientorauditcommitteehiresauditorExternalUsersAuditorissuesreportrelieduponbyusersOtherAssuranceServicesMostoftheotherassuranceservicesthatCPAsprovidedonotmeettheformaldefinitionofattestationservices.TheCPAisnotrequiredtoissueawrittenreport.Theassurancedoesnothavetobeaboutthereliabilityofanotherparty’sassertionaboutcompliancewithspecifiedcriteria.AICPAAssuranceServicesTheAICPAformedtheSpecialCommitteeonAssuranceServices(SCAS).AssuranceServicesonInformationTechnologyThegrowthoftheInternetandnewwaysofconductingbusinesselectronically(merce)isdrivingthedemandforotherassuranceservices.AssuranceServicesonInformationTechnologyWebTrustisanattestationservice,andtheWebTrustsealisasymbolicrepresentationoftheCPA’sreportonmanagement’sassertionsaboutitsdisclosureofelectroniccommercepractices.AssuranceServicesonInformationTechnologySysTrustisanattest-typeengagementtoevaluateandtestsystemreliabilityinareassuchassecurityanddataintegrity.OtherAssurance

ServicesExamplesControlsoverandrisksrelatedtoinvestments,includingpoliciesrelatedtoderivatives…assessingtheprocessesinacompany’sinvestmentpracticestoidentifyrisksandtodeterminetheeffectivenessofthoseprocesses.involvesOtherAssurance

ServicesExamplesAssessrisksofaccumulation,distribution,andstorageofdigitalinformation…assessingsecurityrisksandrelatedcontrolsoverdataandotherinformationstoredelectronically,includingtheadequacyofbackupandoff-sitestorage.involvesOtherAssurance

ServicesExamplesFraudandillegalactsriskassessment…developingfraudriskprofilesandassessingtheadequacyofcompanysystemsandpoliciesinpreventinganddetectingfraudandillegalacts.involvesOtherAssurance

ServicesExamplesCompliancewithtradingpoliciesandproceduresCompliancewithentertainmentroyaltyagreementsISO900certificationEnvironmentalauditAssurance,Attestation,andNonassuranceServicesOtherAssuranceServicesCertainManagementConsultingOtherAttestationServices(e.g.,WebTrust,SysTrust)ATTESTATIONSERVICESAuditsReviewsInternalControloverFinancialReportingASSURANCESERVICESAssurance,Attestation,andNonassuranceServicesCertainManagementConsultingNONASSURANCESERVICESOtherManagementConsultingTaxServicesAccountingandBookkeepingLearningObjective6Differentiatethethreemaintypesofaudits.TypesofAuditsOperationalComplianceFinancialStatementOperationalAuditExampleEvaluatecomputerizedpayrollsystemforefficiencyandeffectivenessInformationNumberofrecordsprocessed,costsofthedepartment,andnumberoferrorsEstablishedCriteriaCompanystandardsforefficiencyandeffectivenessinpayrolldepartmentAvailableEvidenceErrorreports,payrollrecords,andpayrollprocessingcostsComplianceAuditExampleDeterminewhetherbankrequirementsforloancontinuationhavebeenmetInformationCompanyrecordsEstabli