A Model of Business Identify and be familiar with the major organizations that affect the public accounting profession's environment. Understand the significant changes that have taken place in the auditing profession over the past two decades Identify and be familiar with the major organizations that affect the public accounting profession's environment Auditing Standards Understand there are auditing standards that are established by both U.S. and international standard setters Be familiar with the "principles underlying an audit conducted in accordance with generally accepted auditing standards." Understand the nature of auditing standards Auditing, Ethics, and the Code of Professional Conduct Understand that the auditing profession places a premium on ethical behavior and is governed by a Code of Professional Conduct. Know that management is primarily responsible for the entity's financial statements and understand the auditor's responsibility for detecting errors, material fraud, and illegal acts.