Audit Standards Research Memos Assignment

Deliverables. Papers are due on Sunday at midnight

The Assignment:

For each memo you will select a standard from the appropriate list and explain how it will affect your clients audit. Here is how you do this:

1. Select a public company that you will be auditing. This should be a public company that will have financial statements available. Select a company you are interested in learning about for the semester.

2. Research your company sufficiently to understand its business model, products, customers, vendors and management/directors. Read the most recent financial statements to gain an understanding of the types of assets and liabilities on the balance sheet. Use the statements to be familiar with the sources of revenues and typical operating expenses. The 10-K will have this information. Use EDGAR to find the SEC filings at www.sec.gov and/or the company's own web site under investor information.

3. Write a memo for each of the topics listed above and place it in the drop box by the due date.

4. The memo should be addressed to the Audit Committee Chair, the members of the audit committee, and the CFO. You will need to use their names, so research who they are. You may use the DEF 14 A (proxy statement) from EDGAR or the company's web site to find this information. The memo is from you, as the Audit Partner.

5. For each memo choose a professional standard topic to research from the list given for each assignment above. For example: for Memo 1, you might research the topic of Audit Evidence (AS 1105). The topic is your choice; the only requirement is that it come from the list.

6. Research the appropriate standards at www.pcaobus.org. Read them and refer to the chapter material and any other resource to help you research and understand the requirements of the standard.

7. Write up the memo as a way of explaining to your client how the standard will be followed on the upcoming audit. For example, if you are auditing Walmart and you have selected the topic of Confirmations (AS 2310) you might write a memo that references the many accounts that must be confirmed because each store has one. Explain the document you will use for this and how the mailing will comply with the standard. If you chose the same standard for a company like Caterpillar, you would probably do less confirmation and can discuss similar details but referencing fewer accounts.

8. The memo should be one page. Do not include the verbiage of the standard in the memo. Reference the standard by number. The memo should be the explanation of the pertinent standard.

9. The memo will be graded for grammar, syntax, spelling, clarity, completeness, and all other writing skills detailed on the rubric. Remember, a memo may be all a client ever sees of you. If you dont write it well, they will not trust your accounting skills. You may be the world's best accountant; but, if you can't communicate about accounting that won't matter.

I will always welcome your questions as you work on your case. Good luck!

General Auditing Standards

1000 General Principles and Responsibilities

AS 1001: Responsibilities and Functions of the Independent Auditor

AS 1005: Independence

AS 1010: Training and Proficiency of the Independent Auditor

AS 1015: Due Professional Care in the Performance of Work

1100 General Concepts

AS 1101: Audit Risk

AS 1105: Audit Evidence

AS 1110: Relationship of Auditing Standards to Quality Control Standards

1200 General Activities

AS 1201: Supervision of the Audit Engagement

AS 1205: Part of the Audit Performed by Other Independent Auditors

AS 1210: Using the Work of an Auditor-Engaged Specialist

AS 1215: Audit Documentation

AS 1220: Engagement Quality Review

1300 Auditor Communications

AS 1301: Communications with Audit Committees

AS 1305: Communications About Control Deficiencies in an Audit of Financial Statements

Audit Procedures

2100 Audit Planning and Risk Assessment

AS 2101: Audit Planning

AS 2105: Consideration of Materiality in Planning and Performing an Audit

AS 2110: Identifying and Assessing Risks of Material Misstatement

2200 Auditing Internal Control Over Financial Reporting

AS 2201: An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements

2300 Audit Procedures in Response to RisksNature, Timing, and Extent

AS 2301: The Auditor's Responses to the Risks of Material Misstatement

AS 2305: Substantive Analytical Procedures

AS 2310: The Confirmation Process

AS 2315: Audit Sampling

2400 Audit Procedures for Specific Aspects of the Audit

AS 2401: Consideration of Fraud in a Financial Statement Audit

AS 2405: Illegal Acts by Clients

AS 2410: Related Parties

AS 2415: Consideration of an Entity's Ability to Continue as a Going Concern

2500 Audit Procedures for Certain Accounts or Disclosures

AS 2501: Auditing Accounting Estimates, Including Fair Value Measurements

AS 2505: Inquiry of a Client's Lawyer Concerning Litigation, Claims, and Assessments

AS 2510: Auditing Inventories

2600 Special Topics

AS 2601: Consideration of an Entity's Use of a Service Organization

AS 2605: Consideration of the Internal Audit Function

AS 2610: Initial AuditsCommunications Between Predecessor and Successor Auditors

2700 Auditor's Responsibilities Regarding Supplemental and Other Information

AS 2701: Auditing Supplemental Information Accompanying Audited Financial Statements

AS 2705: Required Supplementary Information

AS 2710: Other Information in Documents Containing Audited Financial Statements

2800 Concluding Audit Procedures

AS 2801: Subsequent Events

AS 2805: Management Representations

AS 2810: Evaluating Audit Results

AS 2815: The Meaning of "Present Fairly in Conformity with Generally Accepted Accounting Principles"

AS 2820: Evaluating Consistency of Financial Statements

2900 Post-Audit Matters

AS 2901: Consideration of Omitted Procedures After the Report Date

AS 2905: Subsequent Discovery of Facts Existing at the Date of the Auditor's Report

Auditor Reporting

3100 Reporting on Audits of Financial Statements

AS 3101: The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion

AS 3105: Departures from Unqualified Opinions and Other Reporting Circumstances

AS 3110: Dating of the Independent Auditor's Report

3300 Other Reporting Topics

AS 3305: Special Reports

AS 3310: Special Reports on Regulated Companies

AS 3315: Reporting on Condensed Financial Statements and Selected Financial Data

AS 3320: Association with Financial Statements