Question

Problem -1 (8 points) Listed below are policies or procedures that the Crystal Cove audit firm has in place. For each identified policy or procedure state if it is an auditing standard or a quality control standard. Audit firm Policy or Procedure Standards Category 1. Determination on whether to accept or reject a new client. a. auditing standard b. quality control standard 2.A client evaluation form. 3. All personnel participate in continuing professional education. 4. Conducting the audit with professional skepticism. 5. Answering an independence questionnaire. 6. Determine and apply materiality levels. 7. Audit staff workpapers are reviewed by audit seniors, then managers. 8. Plan work and supervise assistants.

Answer 1

Solution: 1 Determination on whether to accept or reject a new client Quality control standard 2 A client evaluation form Quality control standard 3 All personnel participate in continuing professional education Quality control standard 4 Conducting the audit with professional skepticism Auditing standard 5) Answering an independence questionanire Quality control standard 6 Determine and apply materiality levels Auditing standard 7 Audit staff workpapers are reviewed by audit seniors, then managers ewed by audit seniors, then managers Quality control standard 8 Plan work and supervise assistants Auditing standard Explanation: GAAS also known as auditing standards measure the auditing engagements and quality such as audit conduct with professional skepticism; applying the materiality levels; planning the work and supervision of the employees. Quality standards measures the standards of quality of work such as evaluation of forms, review of audit work, independence questionanire, acception or rejection of a new client