Chapter TwoThe CPA Profession Skim Generally Accepted Auditing Standards Page 32-36
Rory What are the characteristics of a Limited Liability Company, an LLC?
LLC • Taxed like a general partnership • Limits the owners’ personal liability similar to a corporation
Dominik What are the characteristics of a Limited Liability Partnership, an LLP?
LLP • Taxed like a general partnership • Partners are not personally liable for negligent acts of other partners and employees not under their supervision • Partners are personally liable for their own actions and the negligent acts of employees under their supervision
Lily GAAS GAAP Which refers to Accounting Standards ? Which refers to Auditing Standards ?
Kevin Name of the organization(s) which creates Accounting Standards ? Name of the organization(s) which creates Auditing Standards ?
GAAP FASB primary source GAAS PCAOB (public companies) aicpa ASB (private companies)
FASB CodificationASU Accounting Standards Updates • Effective July 1, 2009, changes to the source of authoritative U.S. GAAP, the FASB Accounting Standards Codification, are communicated through an Accounting Standards Update (ASU). ASUs will be published for all authoritative U.S. GAAP promulgated by the FASB,
FASB Accounting Standards Codification The Codification is the single source of authoritative nongovernmental U.S. GAAP. The Codification is effective for periods ending after September 15, 2009. All previous level (a)-(d) US GAAP standards issued by a standard setter are superseded. Level (a)-(d) US GAAP refers to the previous accounting hierarchy. All other accounting literature not included in the Codification will be considered nonauthoritative.
Organizations Securities Exchange Commission Public Companies Accounting Oversight Board Financial Accounting Standards Board American Institute of Certified Public Accountants State Board of Accountancy California Society of CPAs
Organizations SEC PCAOB FASB American Institute of Certified Public Accountants California Board of Accountancy
GAAP FASB FAS ASC 310-10-25-3 ASU GAAS **public** **private** PCAOB AICPA AS SAS
Elizabeth What is the overall objective of an audit?
Overall Objective AU-C Section 200 Overall Objectives of the Independent Auditor and Conduct of an Audit in .11 The overall objectives of the auditor, in conducting an audit of financial statements, are to a. obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with an applicable financial reporting framework; and b. report on the financial statements, and communicate as required by GAAS, in accordance with the auditor's findings.
Objectives AU-C 200 Overall Objective of the Independent Auditor and Conduct of an Audit in Accordance with Generally Accepted Auditing Standards AU-C 315 Understanding the Entity and Its Environment and Assessing the Risk of Material Misstatement AU-C 500 Audit Evidence AU-C 700 Forming an Opinion and Reporting on Financial Statements Code of Professional Conduct Objectivity and Independence
Rene What is the objective of AU-C 315?
AU-C 315 Understanding the Entity and Its Environment and Assessing the Risk of Material Misstatement .03 The objective of the auditor is to identify and assess the risks of material misstatement, whether due to fraud or error, at the financial statement and relevant assertion levels through understanding the entity and its environment, including the entity's internal control, thereby providing a basis for designing and implementing responses to the assessed risks of material misstatement.