PCAOB Rule 3520 PCAOB Auditing Standards, Independence. The Yellowbook provides a practical approach to independence, with the idea that auditors and their organizations must be independent of the audited entity. Baseline Gain an excellent baseline of information for understanding the Yellow Book, with guidance found in the 2018 revision of Government Auditing Standards. C:That internal control of the client was satisfactory. There has been an official definition of audit independence since Generally Accepted Auditing Standards were first proposed in 1947 (Tentative Statement of. Understand the concepts and standards of generally accepted government auditing standards (GAGAS) so that you can perform Yellow Book audits. B:That generally accepted auditing standards were followed during the audit. Included within this standard are the concepts. The auditor must have adequate technical training and prociency to perform the audit. 1) Familiarity threat – is the threat that aspects of a relationship with management or personnel of an audited entity, such as a close or long relationship or that of an immediate or close family member, lead an auditor to take a position that is not objective.Ģ) Self-interest threat – is a threat that a financial or other interest will inappropriately influence the auditor’s judgment or behavior.ģ) Management participation threat – is the threat that results from an auditor’s taking on the role of management or otherwise performing management functions on behalf of the entity undergoing an audit.Ĥ) Self-review threat – is the threat that an auditor or an audit organization that is provided non–audit services will not appropriately evaluate the results of previous judgments made or services performed as part of the non–audit services when forming a judgment significant to an audit.ĥ) Bias threat – is the threat that an auditor will, as a result of either political, ideological, social, or other convictions, take a position that is not objective.Ħ) Undue influence threat – is the threat that external influences or pressures will impact in auditor’s ability to make independent and objective judgments.ħ) Structural threats – are threats that an audit organizations placement within a government entity, in combination with the structure of the government entity being audited, will impact the audit organizations ability to perform work and report results objectively. GAAS, in turn, requires auditors to be independent from their clients in both fact and appearance. 3 which of the following is not explicitly included in a standard report for a nonpublic company A:The CPA’s opinion that the financial statements comply with generally accepted accounting principles. Question: com252Fact Saved Help 2 Generally accepted auditing standards require auditors to be independent. Auditing Standards.02 The general, eld work, and reporting standards (the 10 standards) approved and adopted by the membership of the AICPA, as amended by the AICPA Auditing Standards Board (ASB), are as follows: General Standards 1.
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