Tesis De Auditoria

In-Depth Guide to

Public Company Auditing: The Financial Statement Audit




Why an In-Depth Guide
to Public Company Auditing?



The foundation for confi dence in U.S. capital markets is strengthened through effective management, regulation, oversight and assurance. Independent audits of public company financial statements are understood to be a core contributor to thisfoundation. In 2009, the Center for Audit Quality (CAQ) published the Guide to Public Company Auditing—an educational tool for non-auditors that provides an introduction and overview of the key processes, participants and issues related to public company auditing. The foundational guide can be accessed at http://www.thecaq.org/newsroom/pdfs/GuidetoPublicCompanyAuditing.pdf.

The foundational guide,however, only touched the surface of the work involved in an audit of a public company’s fi nancial statements and the context within which public company auditing takes place. The objective of the In-Depth Guide to Public Company Auditing is to give readers a behind-the-scenes look inside the fi nancial statement audit process to provide further insight into the work the independent auditor performsto issue an audit report. This includes processes and practices that determine how a public company audit fi rm decides to accept a new audit engagement, how it prepares for and performs the fi nancial statement audit, and how it reports its findings.

This guide provides a basic definition of the financial statement audit for public companies and the key players involved in the fi nancialreporting process. Next, it takes a look at an audit firm’s system of quality control—the platform for a quality fi nancial statement audit. Then it takes a chronological look at the steps generally taken by independent auditors to audit a company’s fi-nancial statements: engagement acceptance and continuance activities; planning and scoping the audit; and performing and completing the audit.May 2011

What is a Financial Statement Audit?




An independent financial statement audit is conducted by a registered public accounting firm. It includes examining, on a test basis, evidence supporting the amounts and disclosures in the company’s fi nancial statements, an assess-ment of the accounting principles used and significant estimates made by management, as well asevaluating the overall fi nancial statement presentation to form an opinion on whether the fi nancial statements taken as a whole are free of material misstatement.

The independent auditor’s overarching goal is to provide financial statement users with reasonable—but not absolute—assurance that the financial state-ments prepared by management are fairly presented. To communicate that assurance, theindependent auditor provides a report that includes an opin-ion about whether the company’s financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles (GAAP).

An important element of the framework that company management maintains to enable it to produce reliable financial statements is internal control over financialreporting (ICFR). Public companies with market capitalization of $75 million or more are required by law to have an audit of management’s assessment of the effectiveness of ICFR that is integrated with an audit of the financial statements. This is referred to as an integrated audit. The ob-jectives of these two types of audits are complementary but not identical. They are performed by the sameaudit fi rm at the same time and are usually “integrated” in the sense that procedures supporting the opinion on financial statements are executed concurrently with procedures that involve testing of the related controls. As discussed in a later section, control testing may impact the nature, timing and extent of substantive testing performed. This In-Depth Guide to Public Company Auditing focuses...