CH01Professional Practice(审计学,英文版).ppt

CHAPTER 1  Professional Practice 1.User demand for reliable information 2.Brief history of auditing 3.DEFINITIONS OF AUDITING 4.Other kinds of audits and auditors 5.The accounting profession Checkpoints 1.What is the difference between a client and auditee? 2.Define and explain auditing. 3.What is the essence of the risk-reduction of auditing? 4.Define an “assurance engagement”. 5.Other kinds of audits and auditors. 1.User demand for reliable information 1.1 ACCOUNTING (1)It is the process of recording, classifying, and summarizing into financial statements a company`s transactions for the users. (2)The conditions affect demand: A.complexity: numerous and complicated B.remoteness: distance and time, expertise C.consequences 1.2 AUDITING (1)Potential conflict of interest A.The user need reliable information B.The preparers might benefit by giving false, misleading, and overly optimistic information. (2) ASSURANCE (3)Lend some credibility to financial information. (4) “Lending of credibility” is providing assurance. external auditing of Financial Statements is an assurance engagement. 1.3 Distinguish (1)Auditing does not include the function of financial report production. (2)The function is performed by a company`s accountants under the direction of its management. (3)Auditors obtain evidence to determine whether the information in the FS is reliable 1.4 Client and Auditee They usually are the same economic entity. Occasionally they are different. banker: Client company: Auditee 审计关系模型的异化形式Ⅰ 审计关系模型的异化形式Ⅱ 新的委托者加入的审计关系模型 2.Brief history of auditing (1)The first recorded auditors were the spies of King Darius of ancient Persia (522-486 B.C) （古 波斯大流士） 中国.周西(1100-771B.C).宰夫 (2) AUDIT ,Auditor Auditors acted as “the King's ears” The word AUDITOR comes from the Latin word “AUDIT:to hear” Listened to the oral reports 听审 (3)Modern auditing 1844, British Parliament passed the Joint Stock Companies Act, wh