CPA firms provide audits as well as other attestation and assurance services.

Additional services provided by CPA firms :

1. Accounting and bookkeeping.2. Tax services.3. Management consulting services.

Many small clients with limited accounting staff rely on CPA firms to prepare their financial statements.

CPA firms prepare corporate and individual tax returns for both audit and non audit clients.

Mots CPA firms provide certain services that enable their clients to operate their business more effectively.

Examples : Improving clients accounting system. Advice in risk management. Information technology and E-commerce

systm advice.

The broadest guidelines available to auditors.

GAAS. GAAS fall into three categories :1. General standards.2. Standards of field work.3. Reporting standards.

A Measure of the Quality of Audit Work

Generally Accepted Auditing Standards(GAAS)

SAS No. 1

A. 3 GeneralStandards

Apply to everyphase of auditengagement

B. 3 StandardsOf Field Work

Apply to performance of

audit work

C. 4 StandardsOf Reporting

Apply to development of

audit report

The audit is to be performed by a person or persons having adequate technical training and proficiency as an

auditor.

a. Specific education in auditingb. Professional experience

c. Continuing education

What does auditor training and proficiency involve?

In all matters relating to the assignment, an independence in mental attitude is to be maintained by

the auditor or auditors.Independenc

e

in fact

An auditor must also be

independent in appearance

CPA

Due professional care is to be exercised in the performance of the audit and the preparation of the

report.The Standard of the Prudent Practitioner

ProfessionalSkepticism

ProfessionalJudgment

An auditor must exercise

both …

The work is to be adequately planned and assistants, if any, are to be properly supervised.

Yes, that is the part of

the audit you will be

performing.

A sufficient understanding of internal control is to be obtained to plan the audit and to determine the nature,

timing, and extent of tests to be performed.

First, we need to size up your organization’s

system of internal control!

CPA

Audit Customer

Sufficient competent evidence does not require a fine tooth

comb.

Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and

confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit.

Financial Statement

s

The report shall state whether the financial statements are presented in accordance with generally accepted

accounting principles

The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.

CurrentYear

AccountingPrinciples

PriorYear

AccountingPrinciples

Consistent Application of Accounting Principles

Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise

stated in the report.

FinancialStatementWording

Notes toFinancial

StatementsDisclosures

Include

The report shall contain either an expression of opinion regarding the financial statements, taken as a whole, or

an assertion to the effect that an opinion cannot be expressed.

Financial Statements

Balance Sheet

Profit & Loss

Cash Flows