Fundamental Principles of Auditing

The video explains the fundamental principles of auditing established by the Auditing Standards Board (ASB), applicable to all audits. It covers three main principles: responsibilities, performance, and reporting. Responsibilities involve the auditor's competence, independence, and professional skepticism. Performance includes planning, supervising, and gathering sufficient evidence. Reporting focuses on issuing the auditor's report and expressing opinions on financial statements.

What is the primary role of the Auditing Standards Board (ASB)?

• To regulate financial markets

• To set standards for non-public company audits

• To provide guidelines for tax audits

• To establish standards for public companies

Which principle requires auditors to maintain independence and objectivity?

• Responsibilities

• Performance

• Compliance

• Reporting

What does professional skepticism involve?

• Evaluating evidence without bias

• Accepting all evidence at face value

• Relying solely on previous audits

• Ignoring complex situations

What is a key aspect of the performance principle in auditing?

• Maintaining client relationships

• Setting tax rates

• Planning and supervising the audit

• Issuing financial statements

What marks the conclusion of an annual audit?

• Submission of tax returns

• Issuance of the auditor's report

• Completion of audit test work

• Approval of financial statements