Chapter 2 auditing standards

KIỂM TOÁN AUDITING STANDARDSFor certified public accounting firms The International Auditing and Assurance Standards Board IAASB is an independent standard-setting body that serves the pub

KIỂM TOÁN AUDITING STANDARDS

For certified public accounting firms

The International Auditing and Assurance Standards Board (IAASB)

is an independent standard-setting body that serves the public interest by setting high-quality international standards for auditing, assurance, and other related areas, and by facilitating their adoption and implementation In doing so, the IAASB enhances the quality and consistency of practice throughout the world and strengthens public confidence in the global auditing and assurance profession.The IAASB’s medium-term strategy addresses the following three main themes in the public interest:

- Supporting global financial stability;

- Enhancing the role, relevance and quality of assurance and related services in an evolving world; and

- Facilitating adoption and implementation of the standards.2

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For government accountability office auditors

The International Organisation of Supreme Audit Institutions (INTOSAI), which is an autonomous, independent and non-political organisation, operates as an umbrella organisation for the external government audit community

INTOSAI has provided an institutionalised framework for supreme audit institutions to promote development and transfer of knowledge, improve government auditing worldwide and enhance professional capacities, standing and influence of member SAIs in their respective countries

AUDITING STANDARDS

KIỂM TOÁN AUDITING STANDARDS

For internal auditors

The Institute of Internal Auditors (IIA) is the internal audit profession's global voice, recognized authority, acknowledged leader, chief advocate, and principal educator Generally, members work in internal auditing, risk management, governance, internal control, information technology audit, education, and security

The mission of The Institute of Internal Auditors is to provide dynamic leadership for the global profession of internal auditing

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes 4

KIỂM TOÁNINTERNATIONAL STANDARDS ON AUDITING

Auditing standards are general guidelines to aid auditors in fulfilling their professional responsibilities in the audit of historical financial statements

They include consideration of professional qualities such as competence and independence, reporting requirements, and evidence

KIỂM TOÁNINTERNATIONAL STANDARDS ON AUDITING International Standards on Auditing (ISAs) are

issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC)

-IFAC is the worldwide organization for the accountancy profession, with 159 member organizations in 124 countries, representing more than 2.5 million accountants throughout the world

-The IAASB works to improve the uniformity of auditing practices and related services throughout the world by issuing pronouncements on a variety of audit and attest functions and by promoting their acceptance worldwide

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ISAs do not override a country’s regulations governing the audit of financial or other information, as each country’s own regulations generally govern audit practices

Most countries, including Vietnam, base their auditing standards on ISAs, modified as appropriate for each country’s regulatory environment and statutory requirements

KIỂM TOÁNGENERALLY ACCEPTED AUDITING STANDARDS

10 generally accepted auditing standards (GAAS), which were developed by the AICPA, fall into three categories:

KIỂM TOÁNGENERALLY ACCEPTED AUDITING STANDARDS

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KIỂM TOÁNGENERALLY ACCEPTED AUDITING STANDARDS

General standards: The general standards stress the important

personal qualities that the auditor should possess

- Adequate Technical Training and Proficiency: have formal

education in auditing and accounting, adequate practical experience for the work being performed, and continuing professional education

- Independence in Mental Attitude: CPA firms are required to

follow several practices to increase the likelihood of independence of all personnel

- Due Professional Care: Due care includes consideration of the

completeness of the audit documentation, the sufficiency of the audit evidence, and the appropriateness of the audit report

KIỂM TOÁNGENERALLY ACCEPTED AUDITING STANDARDS

Standards of field work: concern evidence accumulation and other

activities during the actual conduct of the audit

- Adequate Planning and Supervision: the audit is sufficiently

planned to ensure an adequate audit and proper supervision of assistants

- Understand the Entity and its Environment, Including Internal Control: To adequately perform an audit, the auditor must have an

understanding of the client’s business and industry

- Sufficient Appropriate Evidence: Decisions about how much and

what types of evidence to accumulate for a given set of circumstances require professional judgment

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KIỂM TOÁNGENERALLY ACCEPTED AUDITING STANDARDS

Standards of Reporting: require the auditor to prepare a report on

the financial statements taken as a whole, including informative disclosures

- Must state in the auditor’s report whether the financial statements are presented in accordance with generally accepted accounting principles (GAAP)

- Must identify in the auditor’s report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period

- Must so state in the auditor’s report when determining that informative disclosures are not reasonably adequate

- Must either express an opinion regarding the financial statements,

KIỂM TOÁNVIETNAMESE STANDARDS ON AUDITING

The purpose of this Vietnamese Standard on Auditing (VSA) is to establish standards and fundamental principles and provide guidance on procedures to be followed by the audit firm and the auditor in an audit of final accounts of investment

1999: 04 auditing standards including VSA 200, 210, 230 and 700 were established

Up to 12/2005, 37 VSAs were established by the Ministry of Finance 6/12/2012, the Ministry of Finance established 37 new VSAs, replacing most of current VSAs, excluding VSA 910, VSA 920, VSA

930 and VSA 1000

8/5/2015, 4 new VSAs were established and the new VSA 1000 replaced the current one Up to now, there are 45 VSAs in total

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KIỂM TOÁN PROFESSIONAL ETHICS

What are ethics?

- Ethics can be defined broadly as a set of moral principles or values

- Ethical behavior is necessary for a society to function in an orderly manner Ethics is the glue that holds a society together

- The need for ethics in society is sufficiently important that many commonly held ethical values are incorporated into laws

KIỂM TOÁN PROFESSIONAL ETHICS

Special need for ethical conduct in accounting professions

A CPA, as a professional, recognizes a responsibility to the public,

to the client, and to fellow practitioners, including honorable behavior, even if that means personal sacrifice

The reason for an expectation of a high level of professional conduct by any profession is the need for public confidence in the quality of service by the profession, regardless of the individual providing it

It is essential that the client and external financial statement users have confidence in the quality of audits and other services

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KIỂM TOÁN PROFESSIONAL ETHICS

Code of ethics for CPA firms

The code of ethics for professional Accountants was published by the International Federation of Accountants (IFAC)

Its mission to serve the public interest by:

-contributing the development of high-quality standards and guidance;

-facilitating the adoption and implementation of high-quality standards and guidance;

-contributing the development of strong professional accountants, and promoting the value of professional accountants worldwide;

KIỂM TOÁN PROFESSIONAL ETHICS

Code of ethics for government accountability office auditors

INTOSAI has deemed it essential to establish an international Code of Ethics for auditors in the public sector.

A Code of Ethics is a comprehensive statement of the values and principles which should guide the daily work of auditors

A code of ethics for auditors in the public sector should consider the ethical requirements of civil servants in general and the particular requirements of auditors, including the latter’s professional obligations.

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KIỂM TOÁN PROFESSIONAL ETHICS

Code of ethics for internal auditors

The Office of Internal Audit adopts and upholds the Code of Ethics as promulgated by the Institute of Internal Auditors

The purpose of The Institute’s Code of Ethics is to promote an ethical culture in the profession of internal auditing

A code of ethics is necessary and appropriate for the profession of internal auditing as it is founded on the trust placed in its objective assurance about risk management, control, and governance

KIỂM TOÁN CODE OF ETHICS FOR CPA FIRMS

A professional accountant shall comply with the following fundamental principles:

a.Integrity – to be straightforward and honest in all professional and

business relationships

b.Objectivity – to not allow bias, conflict of interest or undue

influence of others to override professional of business judgments

c.Professional Competence and Due Care – to maintain

professional knowledge and skill at the level required to ensure that

a client or employer receives competent professional service based

on current developments in practice, legislation and techniques and act diligently and in accordance with applicable technical and professional standards

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KIỂM TOÁN CODE OF ETHICS FOR CPA FIRMS

A professional accountant shall comply with the following fundamental principles:

d.Confidentiality – to respect to confidentiality of information

acquired as a result of professional and business relationships and therefore not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose, nor use the information for the personal advantage of the professional accountant or third parties

e.Professional Behavior – to comply with relevant laws and

regulations and avoid any action that discredits the profession

KIỂM TOÁN CODE OF ETHICS FOR CPA FIRMS

Threats: when a relationship or circumstance

creates a threat, such a threat could compromise, or could be perceived to compromise, a professional accountant’s compliance with the fundamental principles

Threats fall into one or more of the following categories:

a.Self-interest threat – the threat that a financial or other interest

will inappropriately influence the professional accountant’s judgment

or behavior;

b.Self-review threat – the threat that a professional accountant will

not appropriately evaluate the results of a previous judgment made,

or activity or service performed by the professional accountant, or by another individual within the professional accountant’s firm or employing organization, on which the accountant will rely when forming a judgment as part of performing a current activity or providing a current service, 20

KIỂM TOÁN CODE OF ETHICS FOR CPA FIRMS

Threats fall into one or more of the following categories:

c.Advocacy threat – the threat that a professional accountant will

promote a client’s or employer’s position to the point that the professional accountant’s objectivity is compromised;

d.Familiarity threat – the threat that due to a long or close

relationship with a client or employer, a professional accountant will

be too sympathetic to their interests or too accepting or their work; and

e.Intimation threat – the threat that a professional accountant will

be deterred from acting objectively because of actual or perceived pressures including attempts to exercise undue influence over the