Chapter 1: Quality Auditing: "Why It Matters" Study Guide

external auditors performing a financial statement audit provide independent assurance on 1) reliability of the financial statements 2) internal control effectiveness the need for independent assurance arises from potential bias, remoteness, complexity, consequences financial statement audit a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria; and communicating the results to interested users objective of a financial statement audit to obtain reasonable assurance about whether the financial statements are free from material misstatements and to report on the financial statements based on the auditor's findings management's assertions exist, be complete, reflect a right or obligation, be properly valued, and be adequately presented/disclosed audit quality performed in accordance with generally accepted auditing standards (GAAS), presented in accordance with GAAP and not materially misstated whether due to errors or fraud audit quality framework 1. audit firm culture 2. skills and qualities of the audit partner and engagement team 3. effectiveness of the audit process 4. reliability and usefulness of audit reporting 5. factors outside the control of auditors principles provide the basis for the rules of conduct, broadly articulate the auditors' responsibilities rules specific guidelines that reflect the broad principles of the profession rulings issued in response to member questions about specific situations independence rule