本科会计专业英语chapter 15教学课件

1、YCF正版可修改PPT(本科）会计专业英语chapter 15教学课件Chapter 15 Introduction to Auditing 2Learning ObjectivesExplain the nature of auditing and its types.Recognition the objectives of auditing. Identify the stages of an audit. Understand the audit theory.Interpret the mechanism to monitor and enforce GAAS.3Mini CaseH

2、arry is an internship working in a company, and Matt is the financial manager of this company. The following is a conversation between Matt and Harry.Harry: “Hi, Matt, I found that accountants in public practice earn much of their revenue from the provision of external audit services. And companies

3、pay substantial fees for the services of external auditors. ”Matt: “Yes, of course, the external auditors pay their labor.”Harry: “But I think the work of external auditors does not appear to improve companies profitability so it is not immediately apparent what the benefit of an external audit is.

4、Why is financial statements audit compulsory? And are the benefits derived from the work of external auditors?”Identify:If you were Matt, how will you answer Harrys question?4ContentTopic 1: An overview of AuditingTopic 2: Auditing Framework5Topic 1: An overview of Auditing1. Nature of AuditingAudit

5、ing is the process by which a competent, independent person accumulates and evaluates evidence about quantifiable information related to a specific economic entity for the purpose of determining and reporting on the degree of correspondence between the quantifiable information and established criter

6、ia.6Topic 1: An overview of Auditing2. Audit ObjectivesThere are eight audit objectives (1) validity, (2) completeness, (3) ownership, (4) valuation, (5) timing, (6) mechanical accuracy, (7) classification, and (8) disclosure.7Topic 1: An overview of Auditing3. Types of Audits(1) Operational Audits.

7、An operational audit is a review of any part of an organizations operating procedures and methods for the purpose of evaluating efficiency and effectiveness. At the completion of an operational audit, recommendations to management for improving operations are normally expected.(2) Compliance AuditsT

8、he purpose of a compliance audit is to determine whether the auditee is following specific procedures or rules set down by some higher authority.(3) Audit of Financial StatementsAn audit of financial statements is conducted to determine whether the overall financial statements-the quantifiable infor

9、mation being verified-are stated in accordance with specified criteria.8Topic 1: An overview of Auditing4. Distinction Between Auditing and AccountingAccounting is the recording, classifying, and summarizing of economic events in a logical manner for the purpose of providing financial information fo

10、r decision making. In auditing accounting data, information properly reflects the economic events that occurred during the accounting period.9Topic 1: An overview of Auditing5.Advantages and Disadvantages of an Audit(1)Advantages of an AuditDisputes between management may be more easily settled.Majo

11、r changes in ownership may be facilitated if past accounts contain an unqualified audit report.Application to third parties for finance may be enhanced by audited accounts.(2)Disadvantages of an AuditThe audit fee! Clearly the services of an auditor must be paid for.The audit involves the clients st

12、aff and management in giving time providing information to the auditor.10Topic 2: Auditing Framework1. Stages of an Audit(1)PlanningStaffing, timing, the overall audit strategy and the audit procedures to be employed are the key decisions made at this stage of the audit. (2)Interim auditIt is carrie

13、d out during the period of review. (3)Final auditIt is taken place after the year end. (4)ReportingIt is the final stage when the auditor expresses an opinion on the financial statements.11Topic 2: Auditing Framework2. Auditing Theory(1) General GAAS StandardsThe three general standards of GAAS rela

14、te to the personal integrity and professional qualifications of auditors. Three of the five concepts of auditing theory providing the primary framework for the general standards are ethical conduct, independence, and due audit care. The other two evidence and fair presentation are related to other s

15、tandards.12Topic 2: Auditing Framework(2) GAAS Field Work Standards Three postulates are closely related to the field standardsverifiability (financial statements and financial data are verifiable)internal control and reliability(the existence of a satisfactory internal control structure reduces the

16、 probability of errors and irregularities) and the past holds true for the future (in the absence of clear evidence to the contrary, what has held true in the past for the enterprise under examination will hold true in the future).13Topic 2: Auditing Framework(3) GAAS Reporting StandardsThe fifth co

17、ncept in auditing theory is fair presentation. Decisions about fair presentation are often difficult. The general framework for financial statement auditing theory is: 14Topic 2: Auditing FrameworkExhibit 15-2 below summarize the interrelationships of the three elements of the theory:Exhibit 15-2 Au

18、diting Theory Interrelationship15Topic 2: Auditing Framework3. Mechanism to Monitor and Enforce GAAS(1) Fundamental Principles of EthicsFive principles are expected to comply with integrity, objectivity, professional competence and due care, confidentiality, and professional behavior. Integrity impo

19、ses an obligation to be straight forward and honest in professional and business relationships.Objectivity obliges professional accountants not to compromise their professional or business judgment because of bias, conflicts of interest or the undue influence of others.Professional competence and du

20、e care knowledge and skill at adequate levels, technical and professional standards.Confidentiality sets out the need for confidentiality of all information obtained during professional engagements unless there is a legal or professional requirement to disclose the information or the client has give

21、n permission for its disclosure.Professional behavior sets out the need to comply with relevant laws and regulations and avoid any action that may discredit the profession.16Topic 2: Auditing Framework(2) Codes for Professional Accountants in Public PracticeProfessional appointment. Auditors should

22、agree to provide only those services that the professional accountant in public practice is competent to perform. Before accepting a new client relationship, a professional accountant in public practice should consider whether acceptance would create any threats to compliance with the fundamental pr

23、inciples.Conflicts of interest. A professional accountant in public practice should take reasonable steps to identify circumstances that could pose a conflict of interest. For example, a threat to objectivity may be created when auditor competes directly with a client or has a joint venture or simil

24、ar arrangement with a major competitor of a client. 17Topic 2: Auditing FrameworkSecond opinion. A professional accountant in public practice is asked to provide a second opinion on the application of accounting, auditing, reporting or other standards or principles to specific circumstances or trans

25、actions by or on behalf of a company or an entity that is not an existing client. When asked to provide such an opinion, a professional accountant in public practice should evaluate the significance of the threats and if they are other than clearly insignificant, safeguards should be considered and

26、applied as necessary to eliminate them or reduce them to an acceptable level. Such safeguards may include seeking client permission to contact the existing accountant, describing the limitations surrounding any opinion in communications with the client, and providing the existing accountant with a c

27、opy of the opinion.18Topic 2: Auditing FrameworkFees and other types of remuneration. The fact that one professional accountant in public practice may quote a fee lower than another may be threats to compliance with the fundamental principles arising from the level of fees quoted. Marketing professi

28、onal services. A self-interest threat to compliance with the principle of professional behavior is created if services, achievements or products are marketed in a way that is inconsistent with that principle. Auditor should not bring the profession into disrepute when marketing professional services

29、 and should not make exaggerated claims for services offers, qualifications possessed or experience gained, or make disparaging references to unsubstantiated comparisons to the work of another.19Topic 2: Auditing FrameworkGifts and hospitality. A professional accountant in public practice, or an imm

30、ediate or close family member, may be offered gifts and hospitality from a client.Custody of client assets. A professional accountant in public practice should not assume custody of client monies or other assets unless permitted to do so by law and, if so, in compliance with any additional legal dut

31、ies imposed on a professional accountant in public practice holding such assets. To safeguard against such threats, a professional accountant in public practice entrusted with money ( or other assets) belonging to others shouldkeep such assets separately firm personal or firm assets; Use such assets

32、 only for the purpose for which they are intended; at all times, be ready to account for those assets, and any income, dividends or gains generated to any persons entitled to such accounting andcomply with all relevant laws and regulations relevant to the holding of and accounting for such assets.20Topic 2: Auditing FrameworkIndependence. Independence is a major attribute o