Homework Assignments

2-7 The Public Company Accounting Oversight Board was established through the Sarbanes-Oxley Act to provide oversight over auditors for public companies audit, establishes auditing and quality control standards for public company audits, and performs inspections of the quality controls at audit firms performing those audits. The American Institute of Certified Public Accountants (AICPA) is responsible for issuing auditing, attestation, and quality control statements, standards and guidance to certified public accountants for private companies.

2-10 The criticism of the 10 GAAS by some critics, is founded in the belief that by the GAAS being more specific, then they would thereby eliminate some difficult audit decision and provide a line of defense for a CPA firm charged with conducting an inadequate audit. However, highly specific requirements could turn auditing into mechanistic evidence gathering, devoid of professional judgment. Therefore, from differing points of views, there is probably greater harm in defining authoritative guidelines too specifically than too broadly.

2-16. a. The first general standard, which states in part that the audit must be performed by a person or persons having adequate technical training, requires that an auditor have

(1) education and experience in the field of auditing.

b. Which of the following best describes what is meant by generally accepted auditing standards?

(4) Audit objectives generally determined on audit engagements.

c. The general group of the GAAS includes a requirement that

(2) due professional care be exercised by the auditor

d. What is the general character of the three GAAS classified as the standards of field work?

(3) The criteria of audit planning and evidence gathering.

2-20.
The Mobile Home Manufacturing