1.1 Case Facts
Introduction
Following the stock market crash of 1929 and the subsequent era of economic decline—known as the Great Depression—the United States Congress passed the Securities Act of 1933 and the Securities Exchange Act of 1934 to help protect public investors by improving the reliability of financial reporting. Among the sweeping changes mandated by these two federal laws was the requirement that annual financial reports of all publicly traded companies were required to be audited by an independent public accountant (i.e., an auditor).
In order to ensure these annual audits of public companies were conducted independently and with adequate rigor and consistency, a set of universally recognized and accepted auditing standards was required. Over time, the authority and responsibility to set these standards has moved from one organization to another.
To appreciate and understand the relationships between today’s regulators and practitioners, it is important to have a basic understanding of the evolution of auditing standard-setting practices. In completing this case, you will be introduced to the history of auditing standards in the United States, and you will become familiar with today’s auditing regulators in the United States and around the globe. You will also learn to research current auditing standards for prescriptive guidance on several auditing topics.
Part 1: Understanding the Audit Concept
The following questions will introduce you to the history and evolution of auditing standard-setting practices by requiring you to refer to a number of external documents. As you view these documents and answer the related questions, attempt to use the information to appreciate the regulatory landscape that auditors have experienced over the past several decades.
Want to try our built-in assessments?
Use the Request Full Access button to gain access to this assessment.
Want to try our built-in assessments?
Use the Request Full Access button to gain access to this assessment.
Want to try our built-in assessments?
Use the Request Full Access button to gain access to this assessment.
Want to try our built-in assessments?
Use the Request Full Access button to gain access to this assessment.
Want to try our built-in assessments?
Use the Request Full Access button to gain access to this assessment.
Part 2: Performing the Audit
Auditors working for firms that have public, non-public, and international clients may find themselves conducting audits under the jurisdiction of different auditing regulators. When planning and carrying out an audit, it’s common for auditors to refer to the authoritative standards to understand the regulators’ objectives and requirements.
In order to understand how to (1) search auditing standards and (2) compare similar standards from different regulators, complete the following activities and questions.
Want to try our built-in assessments?
Use the Request Full Access button to gain access to this assessment.