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Rittenberg/Schwieger/Johnstone Auditing: A Business Risk Approach Sixth Edition Chapter 2. Corporate Governance, Audit Standards. Define Corporate Governance.
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Corporate Governance, Audit Standards
Significant provisions include:
Financial statement audits are only a small part of the demand for assurance services.
Attestation standards have been developed to ensure quality for a broader array of services beyond financial statement audits.
Such services include attesting to financial forecasts and projections, pro forma financial information, internal controls, compliance with contracts or regulatory requirements, and agreed-upon procedures
Similar to GAAS with the exception of
Audit Standard SetterScope and Basis of Authority
Public Company Authority Base: U.S. Congress: Expressed in the
Accounting Standards Sarbanes-Oxley Act of 2002
Scope: Sets audit standards for the audits of all
public companies that are registered with the SEC
American Institute Authority Base: Historical, as self-regulatory
of CPAs (AICPA) organization that had earned the public's trust
Auditing standards for the audits of small
Attestation standards for areas other than public
company reports on internal control
Assurance services that are less in scope than an
audit such as reviews and compilations
General Accounting Authority Base: Congressional laws
Office (GAO) establishing the GAO as audit arm of the
Congress and delegating to them the authority
to set standards for audits of governmental entities
Scope: Sets audit standards for the audits
of all governmental entities in the U.S.
International Audit Authority Base: As agreed upon by countries
Standards Committee who agree to abide by their standards
Scope: Standards for financial statement
audits across most of Europe and many
International Audit Authority Base: Developed by the Institute
Standards Board of Internal Auditors as a self-regulatory
Scope: Standards for the practice of internal auditing around the world
Gathering Audit Evidence: Testing Assertions
Third Standard of Fieldwork requires auditor to gather "sufficient, competent, evidential matter" in order to reach a conclusion on the fairness of the financial statements
Summarize Audit Evidence and Reach Audit Conclusion