BACC 461 Professional Standards Review

These flashcards cover key concepts from the BACC 461 Professional Standards course, including terminology and important principles related to auditing and financial statements.

Professional Skepticism

A critical mindset that auditors must maintain, questioning the validity of information and assessing audit evidence.

Audit Services

Two primary types: audit of financial statements and audit of internal controls over financial reporting (ICFR).

Assurance Services

Services provided by professionals that enhance the quality of information prepared by others.

Quality Control Standards

Standards aimed at promoting and enhancing the quality of services provided by CPA firms.

Management Assertions

Claims made by management regarding the accuracy and completeness of the financial statements.

Completeness Assertion

Relates to whether all transactions and accounts that should be presented in financial statements are included.

Accuracy Assertion

Ensures that amounts and data relating to transactions have been recorded appropriately.

Existence Assertion

Asserts that assets, liabilities, and equity interests actually exist as of a given date.

Cutoff Assertion

Ensures transactions are recorded in the correct accounting PERIOD.

Rights and Obligations Assertion

Confirms that the entity has rights to the assets and obligations for liabilities.

Attestation Services

Reports by practitioners on subject matters that may include audits plus additional services.

Financial Statement Users

Groups such as investors and lenders who analyze financial statements for decision-making.

Public Company Accounting Oversight Board (PCAOB)

Entity that sets audit standards for PUBLICLY traded companies.

Securities and Exchange Commission (SEC)

Federal agency responsible for protecting investors through regulation of the securities industry.

Sarbanes-Oxley Act of 2002

Legislation enacted to enhance transparency and accountability in financial reporting following accounting scandals.

AICPA's Auditing Standards Board (ASB)

Organization responsible for issuing standards for audits of PRIVATE companies.