What is professional judgment in auditing?
What is professional judgment in auditing?
Professional judgment is defined as the application of the accumulated knowledge and experience gained through a relevant accounting or auditing training, by making use of the ethical standards, resulting in making informed decisions about the courses of action that are appropriate in specific circumstances, such as an …
What is professional independence in auditing?
Independence requires integrity and an objective approach to the audit process. The concept requires the auditor to carry out his or her work freely and in an objective manner. Independence of the internal auditor means independence from parties whose interests might be harmed by the results of an audit.
What is audit documentation in auditing?
Audit documentation is the written record of the basis for the auditor’s conclusions that provides the support for the auditor’s representations, whether those representations are contained in the auditor’s report or otherwise.
What are the auditing standards?
Standards on Auditing
| Standards on Quality Control (SQCs) | |
|---|---|
| SQC 1 | Quality Control for Firms that Perform Audit and Reviews of Historical Financial Information, and other Assurance and Related Services Engagements |
| Revised SA 299 | Joint Audit of Financial Statements |
| SA 300 | Planning an Audit of Financial Statements |
What is the importance of professional judgement?
Professional judgment involves a practitioner applying their training, knowledge and experience in making appropriate decisions relating to procedures required and conclusions reached in a review engagement. Professional judgment is also required in assigning the appropriate levels of staff to a review engagement.
What is professional skepticism and professional judgement?
Professional Skepticism: It refers to an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence.
Why is independence important in audit?
Ensuring auditor independence is as important as ensuring that revenues and expenses are properly reported and classified. If the auditor’s independence is impaired then the company has not satisfied the requirement to file financial statements audited by an independent accountant.
What are the principles of audit independence?
We believe that the Commission’s four guiding principles of independence – (1) auditors should not have mutual or conflicting interests with their audit clients; (2) auditors should not audit their own audit work; (3) auditors should not function as client management or employees; and (4) auditors should not act as …
What is the main purpose of audit documentation?
| Purposes of Audit Documentation | |
|---|---|
| 1 | It provides evidence of auditors’ basis for a conclusion about the achievement of the overall objective. |
| 2 | It provides evidence showing that audit work was properly planned and performed in accordance with ISAs and other legal and regulatory requirements. |
What are the three objectives of audit documentation?
Documentation serves multiple purposes: it aids the planning and performance of the audit, it facilitates and supports review, it helps demonstrate the application of the requirements of applicable professional standards, and it supports the evaluation of the sufficiency and appropriateness of evidence obtained and the …
What are the three main sets of auditing standards?
The 10 standards in the GAAS are grouped into three categories: general standards, standards of field work, and standards of reporting.
What are the three general standards of auditing?
GAAS come in three categories: general standards, standards of fieldwork, and standards of reporting. Keep in mind that the GAAS are the minimum standards you use for auditing private companies.