Peer reviews refer to a study and appraisal by an independent evaluator ("peer reviewer") of a CPA firm's work. Such control is vital because even one substandard audit could cause the firm to be defendant in a lawsuit that could threaten its continued existence. Quality control in a public accounting firm means policies and procedures which help assure that each audit meets at least a minimum standard of quality. When noncompliance is identified or suspected the auditor must pursue. Remain alert to possibility of such acts throughout the audit.ĭ. Inspect correspondence if any, with the relevant licensing or regulatory authorities.Ĭ. Inquire of management and, where appropriate, those charged with government about compliance.ī. its against the law, but doesn't affect financial statements so it is not auditors responsibility. example of other laws: racial discrimination.
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Other laws that do not have a direct effect (do not fall under auditors responsibilities) on amounts and disclosures-Limited to undertaking specified audit procedures that may identify noncompliance that may (ultimately) have a material effect on the financial statements.
10 GENERALLY ACCEPTED AUDITING STANDARDS QUIZLET FREE
Material direct effect (falls under auditors responsibilities) on financial statement amounts (generally those requiring an adjusting journal entry)-Design the audit to obtain reasonable assurance that the financial statements are free from material misstatements arising from noncompliance (same as above for misstatements due to error or fraud).Ģ.
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