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Questions and Answers
Which of the following qualities is NOT considered essential for an auditor?
Which of the following is NOT an example of an engagement-specific safeguard in the work environment?
Which of the following is an example of a published policy or procedure to encourage and empower staff to communicate compliance concerns?
Which of the following is a potential audit risk related to the quality of the audit?
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Which of the following is an example of objectivity in an audit?
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Which of the following is NOT a consideration in determining materiality in an audit?
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Which of the following is an example of compliance with the fundamental principles of an audit?
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Which of the following is a potential audit risk related to financial reporting?
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Which of the following is an example of a safeguard to ensure the objectivity of an auditor?
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Which of the following is NOT a consideration in determining the quality of an audit?
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Study Notes
Work Environment Safeguards
- Firm-wide safeguards and engagement-specific safeguards are two types of work environment safeguards.
- Examples of firm-wide safeguards include:
- Leadership that stresses compliance with fundamental principles.
- Policies and procedures to implement and monitor quality control of engagements.
- Documented policies regarding identifying threats to compliance with fundamental principles.
- Policies and procedures to monitor and manage reliance on revenue from a single client.
- Using different partners and engagement teams for non-assurance services to an assurance client.
- Policies and procedures to prohibit inappropriate influence on the outcome of an engagement.
- Timely communication of firm policies and procedures to all partners and staff.
- Designating a senior manager to oversee the quality control system.
- Examples of engagement-specific safeguards include:
- Having a Professional Accountant in Public Practice (PAPP) review non-assurance work.
- Consulting an independent third party, such as a committee of independent directors or another PAPP.
- Discussing ethical issues with those charged with governance of the client.
Fundamental Principles of Professional Ethics
- Integrity implies fair dealing and truthfulness.
- An auditor should not be associated with reports or information that contains false or misleading statements.
- An auditor should take steps to disassociate from such information when aware of it.
Objectivity
- Objectivity means not allowing bias, conflict of interest, or undue influence to override professional or business judgments.
Professional Competence and Due Care
- Requires maintaining professional knowledge and skill to ensure competent services.
- Imposes obligations to:
- Maintain professional knowledge and skill.
- Act diligently in accordance with applicable technical and professional standards.
The Qualities of an Auditor
- The nine qualities that should characterize an auditor are:
- Accountability
- Integrity
- Objectivity and Independence
- Competence
- Rigour
- Judgement
- Clear, complete, and effective communication
- Association
- Providing Value
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Description
Learn about the importance of firm-wide and engagement-specific safeguards in the workplace, including leadership, policies, and procedures to ensure compliance with fundamental principles.
