Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

What provides the most authoritative guidance for an audit of an issuer?

1. Specific guidance from the Statement on Auditing Standards.

2. Audit disclosure checklists from education classes.

3. General guidance from PCAOB Auditing Standards.

4. An article from the AICPA CPA Letter.

The correct answer is: General guidance from PCAOB Auditing Standards.

The most authoritative guidance for an audit of an issuer is indeed found in the general guidance provided by Public Company Accounting Oversight Board (PCAOB) Auditing Standards. These standards are specifically designed to govern the audits of public companies in the United States and are issued by the PCAOB, which was established by the Sarbanes-Oxley Act of 2002. The PCAOB standards are mandatory and must be followed by registered firms conducting audits of public companies, ensuring a consistent level of quality and accountability in the auditing process. In contrast, specific guidance from the Statement on Auditing Standards is generally aimed at non-issuer audits and may not hold the same level of authority for audits of issuers. Audit disclosure checklists from educational classes may provide useful tools for practitioners, but they do not carry the authoritative weight of regulatory standards. Finally, articles from the AICPA CPA Letter might offer insights or updates on various topics but lack the binding authority that PCAOB standards possess. Thus, when it comes to the highest level of guidance for auditing issuers, the PCAOB Auditing Standards clearly take precedence.