Auditing: A Risk Based-Approach to Conducting a Quality Audit
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Chapter 1, Problem 48RSCQ
To determine

Concept introduction: Auditing standards are made to guide the auditors to perform audits efficiently and effectively. These standards are issued by the American Institute of Certified Public Accountants (AICPA). Public company accounting oversight board (PCAOB) performs inspections of the registered external audit firms that audit public companies.

To describe:The requirements that help in attaining the audit quality andhelp reduce the contact of external auditors to lawsuits.

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The primary purpose for obtaining an understanding of a nonpublic audit client’s internal control is toa. Provide a basis for making constructive suggestions in a management letter.b. Determine the nature, timing, and extent of further audit tests to be performed.c. Provide the rationale for the inherent risk assessment at the financial statement assertion level.d. Provide information for a communication of internal control–related matters to management.
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