英文版：审计学 变化环境中的概念 第三章
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英文版：审计学 变化环境中的概念 第二章
What is the enhanced role of audit committees under Sarbanes?
Is designated as the audit client Has oversight responsibilities over the internal audit and financial reporting processes Must be comprised of "outside" directors, i.e. not members of management or have other relationships with the organization Must report on its activities, including the results of significant discussions with the external auditor
The Sarbanes/Oxley Act of 2002 Continued
Audit Committees must have at least one person who is a financial expert. Other members must be knowledgeable in financial accounting and control Audit engagement partners, as well as other partners and managers with significant roles in the audit, must be rotated off the engagement every five years A "cooling off" period before an audit partner or manager can take a high-level position with an audit client without jeopardizing the independence of the public accounting firm Increased disclosure of "off-balance sheet" transactions or agreements that may have a material effect Requires the GAO to study a number of issues including the effect of consolidation on competition with the accounting profession, and an analysis of mandatory audit firm rotation
Chapter 9 Audit Sampling 审计学-基于环境变化的概念英文版课件
If the sample is not representative of the population, the auditor may draw an incorrect conclusion about whether an account balance is presented fairly:
Discuss Selecting a Sampling
Approach (Continued)
Statistical sampling
Allows auditor to statistically design an efficient sample, measure sufficiency of evidence, and evaluate sample results
The manager's initials are the attribute The auditor would examine sales invoices and look
for the initials
Explain Attribute Estimation Sampling
The appropriate sample size depends on a number of factors including:
cost may be applied more extensively simply because its cheaper to test all items rather than sampling Example: auditors typically confirm all bank account balances Account balances that are immaterial (or where the potential misstatement is immaterial) may not be worth sampling Such accounts may be audited more efficiently with analytics
Discuss Selecting a Sampling
Approach (Continued)
Statistical sampling
Allows auditor to statistically design an efficient sample, measure sufficiency of evidence, and evaluate sample results
The manager's initials are the attribute The auditor would examine sales invoices and look
for the initials
Explain Attribute Estimation Sampling
The appropriate sample size depends on a number of factors including:
cost may be applied more extensively simply because its cheaper to test all items rather than sampling Example: auditors typically confirm all bank account balances Account balances that are immaterial (or where the potential misstatement is immaterial) may not be worth sampling Such accounts may be audited more efficiently with analytics
英文版：审计学 变化环境中的概念 第四章
Chapter 4
Audit Risk and Business Risk
Define the Nature of Risk
In this chapter, we identify four critical components of risk that affect the audit approach and audit outcome Enterprise risk - those that affect the operations and potential outcomes organization activities Engagement risk - comes with association with a specific client Financial reporting risk - those that relate directly to the recording transactions and the presentation of the financial statements Audit risk - risk an auditor may provide an unqualified opinion on financial statements that are materially misstated Each of these components can be managed The effectiveness of risk management processes will determine whether the company continues to exist
Risk Factors Affecting the Audit Financial Health of the Organization
Audit Risk and Business Risk
Define the Nature of Risk
In this chapter, we identify four critical components of risk that affect the audit approach and audit outcome Enterprise risk - those that affect the operations and potential outcomes organization activities Engagement risk - comes with association with a specific client Financial reporting risk - those that relate directly to the recording transactions and the presentation of the financial statements Audit risk - risk an auditor may provide an unqualified opinion on financial statements that are materially misstated Each of these components can be managed The effectiveness of risk management processes will determine whether the company continues to exist
Risk Factors Affecting the Audit Financial Health of the Organization
CHAPTER 5 INTERNAL CONTROL OVER FINANCIAL REPORTING 审计学-基于环境变化的概念英文版课件
Management's philosophy and operating style Organizational structure, including assignment of
authority and responsibility Board of directors and audit committee Human resource policies and practices Integrity and ethical values Commitment to competence Compensation and evaluation programs Effectiveness of the internal audit function
4. Monitoring of the effectiveness of the controls to mitigate risk
Discuss Understanding & Assessing the Control Environment
There are a number of factors an auditor should look at when evaluating an organization's control environment:
Review the Components of an Internal Control System
An internal control system consists of five components
Control environment: overall attitude, awareness, and actions of significant internal groups to maintain a well-controlled organization (tone at the top)
authority and responsibility Board of directors and audit committee Human resource policies and practices Integrity and ethical values Commitment to competence Compensation and evaluation programs Effectiveness of the internal audit function
4. Monitoring of the effectiveness of the controls to mitigate risk
Discuss Understanding & Assessing the Control Environment
There are a number of factors an auditor should look at when evaluating an organization's control environment:
Review the Components of an Internal Control System
An internal control system consists of five components
Control environment: overall attitude, awareness, and actions of significant internal groups to maintain a well-controlled organization (tone at the top)
审计英语课件第3章
with clients
Financial Interests
The Code of Professional Conduct prohibits professional accountants in public practice from owning any stock or other direct investment in audit clients because it is potentially damaging actual audit independence, and it certainly is likely to affect the users' perceptions of the auditors' independence. An indirect financial interest exists when there is a close, but not direct, ownership relationship between the auditor and the client. An example of indirect ownership occurs when a CPA firm audits a mutual fund which owns stock that an audit partner also has in his or her personal portfolio. Another example is the ownership of a stock by an auditor's grandparent. Materiality affects whether indirect financial interest has effect on independence. However, materiality must be considered in relation to the auditor's wealth and income.
Financial Interests
The Code of Professional Conduct prohibits professional accountants in public practice from owning any stock or other direct investment in audit clients because it is potentially damaging actual audit independence, and it certainly is likely to affect the users' perceptions of the auditors' independence. An indirect financial interest exists when there is a close, but not direct, ownership relationship between the auditor and the client. An example of indirect ownership occurs when a CPA firm audits a mutual fund which owns stock that an audit partner also has in his or her personal portfolio. Another example is the ownership of a stock by an auditor's grandparent. Materiality affects whether indirect financial interest has effect on independence. However, materiality must be considered in relation to the auditor's wealth and income.
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Reflect Upon the Unique Licensure for CPAs
Audits and other attestation reports on financial statements can only be signed by those licensed to practice as CPAs by their state board of accountancy Each state board of accountancy sets its own requirements to become a licensed CPA To become a licensed CPA, a person must pass the CPA exam, meet specific education and experience requirements, and agree to uphold the profession and its code of professional conduct
Prohibited Services, SarbanesOxley Act of 2002 (continued)
Internal audit outsourcing services Management functions or human resources - Broker or dealer, investment advisor, or investment banking services Legal services and expert services unrelated to the audit Any other service that the Board determines, by regulation, is impermissible The Act requires that the client's audit committee preapprove any non-audit services, including tax services, not specifically prohibited
Chapter 3
ETHICS: UNDERSTANDING AND MEETING ETHICAL EXPECTATIONS
Discuss Strong Governance and High Ethical Standards
History shows companies with strong corporate governance and high ethical standards generally perform better then those with weak governance and low ethical expectations The key is the tone set by top management. A well-managed organization will have and enforce a code of ethics and/or a conflict of interest policy to guide its members.
What are major threats to independence?
Independence is a state of mind that can be impaired by a number of potential threats Compensation Schemes Partners' compensation in many CPA firms is based in large part on attracting and keeping clients. Partners may feel pressure to accede to client wishes in order to keep them happy Who is the Client? Although the client has the authority to hire and the auditor, CPA firms must reinforce to its auditors that maintaining the public trust is more important than retaining a client where it might appear that its objectivity could be compromised
Comment on Accepting a Public Trust
To maintain the public's trust, public accountants must act with professional integrity To help accountants with ethical dilemmas, professional associations including the AICPA, Institute of Management Accountants, and Information Systems Audit and Control Association, have codes of professional conduct The individual state boards of accountancy and state societies of CPAs have generally adopted the AICPA's Rules of Conduct
Discuss Ways of Managing Threats to Independence
Establishing and Monitoring Codes of Conduct Balanced Compensation Schemes Independent Reviews of Client Acceptance/Retention Decisions Separation of Consulting Activities from Audit Activities Independent Reviews of Audit Work and Audit Documentation Peer Reviews within the Profession Improved Hiring Practices
The SEC requires the audit committees to assess auditor independence and make a written statement on that assessment to the stockholders
Prohibited Services, SarbanesO's Principles for Judging Independence & Prohibited Service
In rules on auditor independence issued in 2001, the SEC summed up its objectives:
The independence requirement serves two public policy goals: Foster high quality audits by minimizing the possibility that any external factors will influence an auditor's judgment Promote investor confidence in the financial statements of public companies In judging independence, the SEC determines whether a relationship or the provision of service: Creates a mutual or conflicting interest between accountant and client Places the accountant in the position of auditing his/her own work Results in the accountant acting as management or an employee of an audit client Places the accountant in the position of being an advocate for the client
Independence: A Foundation Requirement
Auditors express an opinion about whether financial statements are fairly presented
To be perceived as creditable, auditors must be independent in fact and appearance In fact, means the member must be unbiased and objective In appearance means that knowledgeable users of financial statements must believe the auditor is independent
What are major threats to independence?
Familiarity with the Client Auditors serving a client for several years may develop relationships that cause the auditor to be less skeptical than necessary Time Pressure Those in charge of audits are evaluated not only on the quality of their work, but also on their ability to complete audits within time budgets. This may create situations where auditors do not investigate potential problems thoroughly in order to save time Ability to Rationalize It takes time to investigate potential misstatements. To save time, an auditor may rationalize that the misstatement is not likely to be material Auditing Your Own Work CPAs may provide certain services to non-public companies that put auditors in the position of auditing their own work