STANDAR AUDIT

Summary

This transcript provides a comprehensive overview of professional standards and auditing practices in accounting. It discusses the definition of a profession, the importance of education and expertise, and the core responsibilities of auditors. The document delves into the standards set by the Indonesian Institute of Accountants (IAI), including auditing procedures, ethical conduct, and the significance of maintaining independence. Additionally, it highlights the detailed guidelines for preparing financial reports, ensuring accuracy and consistency in accounting practices, and the necessary qualifications and training for auditors to maintain credibility in the auditing process.

Takeaways

• 😀 The definition of a profession is a field of work based on specialized education and skills, with recognition through specific criteria such as organization, independence, and intellectual content.
• 😀 Professional conduct requires meeting certain standards, including intellectual expertise, service orientation, and adherence to a code of ethics.
• 😀 The accounting profession relies heavily on auditing standards to provide credibility to financial reports and ensure proper accountability.
• 😀 Auditors must follow established auditing standards that focus on providing assurance of quality in audit services, regardless of the size or nature of the client organization.
• 😀 The formulation of auditing standards in Indonesia is outlined in the Indonesian Institute of Accountants (IAI) regulations, which include mandatory rules for members practicing public accounting.
• 😀 Auditing standards have evolved through several revisions, with the most notable updates occurring in 1973, 1986, 1990, and 1992, expanding the scope and providing clearer guidelines for auditors.
• 😀 There are four primary types of standards in auditing: general standards, fieldwork standards, reporting standards, and special industry audit guidelines.
• 😀 General standards emphasize the auditor's required education, training, and independence, ensuring they act professionally and remain unbiased in their assessments.
• 😀 Fieldwork standards stress the importance of planning audits effectively, understanding internal control structures, and obtaining sufficient audit evidence to make informed conclusions.
• 😀 Reporting standards ensure that audit reports provide clear statements regarding whether financial statements adhere to generally accepted accounting principles and include sufficient disclosures about inconsistencies or limitations in the audit process.

Q & A

What is the definition of a profession according to the Big Indonesian Dictionary?

A profession is a field of work based on education and specific expertise. Recognition of a profession must meet several requirements, including an organization, specialized education, intellectual content, service orientation, independence, and status.

What are the eight characteristics required for something to be considered a profession according to Tangis (2004)?

The eight characteristics include: 1) mastery of intellectual skills through education and training, 2) providing services to the public, 3) personal nature of the services, 4) objectivity in problem-solving, 5) subordination of personal interests, 6) an independent organization that sets requirements, 7) a code of ethics protecting public interests, and 8) a forum for exchanging knowledge and experience among peers.

Why are auditing standards essential in the accounting profession?

Auditing standards are crucial because they provide credibility to financial statements. Without them, auditors' work cannot be fully trusted. These standards ensure that audits are performed consistently, accurately, and with the necessary professional judgment.

What is the role of auditing standards in relation to audit quality?

Auditing standards help ensure the quality of audits by establishing guidelines for professional judgment, work ethics, and the proper methodology. They provide a framework for auditors to follow, ensuring reliability in their findings and the resulting audit reports.

What does PSA stand for in the context of auditing standards in Indonesia?

PSA stands for 'Pernyataan Standar Auditing,' which refers to the detailed auditing standards issued by the Indonesian Institute of Accountants (IAI). These standards serve as the mandatory guidelines for public accountants in Indonesia.

What are the main components of the Indonesian auditing standards as outlined by IAI?

The main components include: 1) general standards, 2) fieldwork standards, and 3) reporting standards. Each set of standards provides specific guidelines for performing audits, from preparation to reporting the findings.

What are the general standards of auditing according to IAI?

The general standards include: 1) audits must be conducted by individuals with sufficient skills and training, 2) auditors must maintain independence, and 3) auditors must use their professional competence with care in the execution and reporting of the audit.

How do the fieldwork standards impact the audit process?

The fieldwork standards emphasize proper planning, understanding the internal control structure of the entity, and gathering sufficient and competent audit evidence through methods such as inspection, observation, and confirmation to support audit opinions.

What is the role of reporting standards in auditing?

The reporting standards require that the audit report clearly states whether the financial statements comply with generally accepted accounting principles, disclose any inconsistencies, and provide sufficient information about the auditor's findings. It also guides auditors on how to express their opinion on the overall financial statements.

What is the significance of the 'independence' requirement in auditing standards?

Independence is crucial as it ensures that auditors can make objective decisions without being influenced by external pressures. This allows auditors to perform their work with integrity and impartiality, which is essential for producing reliable audit opinions.