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REGULATIONOFTHEPRACTICE
OFPUBLICACCOUNTANCY
Questions
1.
2.
3.
Competencies include both what individual auditors know and what individual
auditors and audit teams do. Competencies are evidenced by auditors applying
their skills in the delivery of services to clients or supporting the delivery of
those services. These competencies categorized as High Opportunity
Competencies and Low Opportunity Competencies are as follows:
High Opportunity Competencies have a high likelihood of being building
blocks for selling or delivering new assurance services.
Analytical Skills
Business Knowledge
Communication Skills
Efficiency
Intellectual Capability
Model Building
People Development
4-2
Relationship Management
Technology
Verification
4.
Administrative Capability
Alleged misstatements that the auditor did not detect in the financial
statements involving
1) improper or inadequate disclosure
2) inappropriate valuations
4-3
Payments for goods or services made other than to the country from
which the goods or services originated.
6.
7.
8.
9.
Due (professional) care is the standard by which the courts and the profession
expect a CPA to practice. A CPA who is found to have exercised due
professional care in an engagement should not have any liability to others.
10. The four gradations are none, negligence, gross negligence (sometimes referred
to as constructive fraud), and fraud. At one extreme is the auditor who performs
an appropriate audit and issues an appropriate report. This auditors degree of
wrongdoing is none. An auditor who commits fraud is at the other extreme,
since he or she knows that the financial statements are misstated and yet issues
an unqualified opinion. An auditor is negligent if he or she does not do what a
reasonably prudent auditor should do in the circumstances. An auditor is
grossly negligent if he or she consistently fails to follow the standards of the
profession on an engagement.
11. Auditors are responsible to clients for negligence, gross negligence, or fraud.
12. Refer to page 126 of the textbook.
4-4
B
C
A
B
A
C
A
C
A
B
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
A
D
C
D
C
A
A
D
B
D
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
B
C
A
A
A
C
C
A
A
C
31.