An independent auditor plans, conducts, and reports an audit’s results under Generally Accepted Auditing Standards(GAAS), providing a measure of audit quality and the objectives to be achieved in an audit. Show
Auditing procedures differ from auditing standards. Auditing procedures are acts the auditor performs during an audit to comply with auditing standards. GAAS, the Generally Accepted Auditing Standard, is the most widely recognized auditing standard in the public accounting and auditing profession. 10 Generally Accepted Auditing Standards10 GASS standards are approved and adopted by the membership of the AICPA, as amended by the AICPA Auditing Standards Board (ASB). These are;  The three categories of the ten generally accepted auditing standards approved by the members of AICPA are explained below; A. General StandardsThe general standards relate to the qualifications of the auditor and the quality of the auditor’s work. 1. Adequate technical training and proficiencyIn every profession, there is a premium on technical competence. Three factors determine the competency of the auditor:
2. Independence in mental attitudeThe auditor must be free of client influence in performing the audit and reporting the findings. The auditor must also meet the independence requirements of the AICPA’s professional conduct. 3. Due to professional careThe auditor must be diligent and careful in performing an audit and issuing a report on the findings. The standard of due care requires the auditor to act in good faith and not to be negligent in an audit. B. Standards of FieldworkThe fieldwork standards are so named because they pertain primarily to the conduct of the audit at the client’s place of business in the field. 4. Adequate planning and proper supervisionThe work is to be adequately planned, and assistants, if any, are to be properly supervised. 5. Understanding the internal control structureA sufficient understanding of internal control is to be obtained to plan an effective and efficient audit. 6. Obtaining sufficient competent evidential matterThe sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis for an opinion regarding the financial statements under audit. Standards of ReportingIn reporting the audit results, the auditor must meet four reporting standards. 7. Financial statements presented in accordance with GAAPThe first reporting standard requires the auditor to identify GAAP as established criteria for evaluating management’s financial statement assertions. 8. Consistency in the application of GAAPThe report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period. 9. Adequacy of informative disclosureInformative disclosures in the financial statements are regarded as reasonably adequate unless otherwise stated in the report. 10. Expression of opinionThe final reporting standard requires the auditor to either express an opinion on the financial statements taken as a whole or state that an opinion cannot be expressed. Generally Accepted Auditing Standards, or GAAS are sets of standards against which the quality of audits are performed and may be judged. Several organizations have developed such sets of principles, which vary by territory. In the United States, the standards are promulgated by the Auditing Standards Board, a division of the American Institute of Certified Public Accountants (AICPA). AU Section 150 states that there are ten standards: three general standards, three fieldwork standards, and four reporting standards. These standards are issued and clarified Statements of Accounting Standards, with the first issued in 1972 to replace previous guidance. Typically, the first number of the AU section refers to which standard applies. However, in 2012 the significantly revised the standards and replaced AU Section 150 with AU Section 200, which does not explicitly discuss the 10 standards. In the United States, the Public Company Accounting Oversight Board develops standards (Auditing Standards or AS) for publicly traded companies since the 2002 passage of the Sarbanes–Oxley Act; however, it adopted many of the GAAS initially. The GAAS continues to apply to non-public companies. General[edit]
Standards of Field Work[edit]
Standards of Reporting[edit]
Clarity Project[edit]In 2004, a project was begun to clarify and converge the standards with the International Standards in Auditing (ISAs). Many of the AU sections are being remapped as part of the Clarity Project. In October 2011, SAS 122 was issued which superseded all previous SASes except 51, 59, 65, 87, and 117-20. In the interim period, these new AU sections are referred to as AU-C until 2014. The AICPA provides a list of the AU-C standards. International Standards on Auditing are stated by the International Auditing and Assurance Standards Board of the International Federation of Accountants. Derivatives of ISAs are used in the audit of several other jurisdictions, including the United Kingdom. What are the three general standards of auditing?The three mandatory elements are the Definition of Internal Auditing, the Code of Ethics, and the International Standards for the Professional Practice of Internal Auditing (Standards).
What is the most reliable audit procedure?According to this article from Chron, physical inspection, confirmation from a third party, and inspection of records and documents are considered three of the most reliable audit procedures.
Why generally accepted auditing standards GAAS are required?The generally accepted auditing standards were created by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA). These guidelines were designed to ensure a specific standard of consistency, accuracy, and accountability across any auditor's review and resulting reports.
Who sets generally accepted auditing standards?In the United States, the standards are promulgated by the Auditing Standards Board, a division of the American Institute of Certified Public Accountants (AICPA).
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