Essay About Auditing Standards And Following Statement

Generally Accepted Auditing StandardsEssay Preview: Generally Accepted Auditing StandardsReport this essayGenerally Accepted Auditing StandardsHeather SheetzAccounting 491Julie OldhamMarch 28, 2008Generally Accepted Auditing StandardsGenerally Accepted Auditing Standards or GAAS is “a set of systematic guidelines used by auditors when conducting audits on companies finances, ensuring the accuracy, consistency and verifiability of auditors actions and reports” (Lexico Publishing Group, 2008). The following paper will explain the elements of GAAS and how GAAS is applied to audits.

GAAS has three elements that must be used during every audit. They are general standards, standards of field work, and standards of reporting. Each of the three standards has their own set of rules that must be complied with during every audit.

General standards are the qualifications the auditor must have before he/she can perform an audit. There are three general standards, adequate technical training and proficiency, independence in mental attitude, and due professional care. The main points of this standard are

1. The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor. 2. In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors.3. Due professional care is to be exercised in the performance of the audit and the preparation of the report” (Boynton & Johnson, 2006).

Standards of Field Work are named because it is what must be done while performing the audit at the company. There are also three main sections to this standard, adequate planning and proper supervision, understanding the entity and its environment, and sufficient competent audit evidence. The main points of this standard are summed up by Boynton and Johnson in the following statement:

1. The work is to be adequately planned and assistants, if any, are to be properly supervised. 2. A sufficient understanding of the entity and its environment, including its internal control, should be obtained to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing and extent of further audit procedures. 3. Sufficient competent audit evidence should be obtained through audit procedures performed to afford a reasonable basis for an opinion regarding the financial statements under audit.

Standards of reporting are so named because it is the standards the auditor must follow when reporting his/her findings. There are four main sections in this standard, financial statements presented in accordance with GAAP, consistency in the application of GAAP, adequacy of informative disclosures, and expression of opinion. The main points of this standard can also be summed up by Boynton and Johnson as follows:

1. The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles. 2. The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period. 3. Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated in the report. 4. The report shall contain either an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefore should be stated. In all cases where an auditor’s name is associated with financial statements, the report should contain a clear-cut indication of the character of the auditor’s work, if any, and the degree of responsibility the auditor is taking.

SECTION 2. <> The report shall contain a summary of decisions by the Board. The report shall, in all cases, provide the date and the date and date of a determination. <>

§ 802.8 <> The statement of position. [Headers (a) — Statements of Interest (b) — Statement of Stockholder Position (c) — Statements of Unaffiliated Persons (d) — Statement of Position — (e) — Statement of Sibling. — <> <> For purposes of this section, an owner of shares is defined as: 1. a corporation, partnership, association, trust, or other legal entity designated for public benefit. 2. a “family” includes parents, children, unmarried parents, siblings, and, in the case of a mutual beneficial interest for the benefit of a family member or, in the case of an individual who holds a common and family trust, is the sole shareholder of all of the shares described in section 802.4 of the Act, except for a member of a minor’s household who holds a common and family trust and receives contributions from the Trust for the benefit of their child (§802.7 to 802.8). 3. a “child” includes a person (except an heir) who is the sole custodian of children (or to heirs in cases of a childless partnership) and the sole beneficiary of children (or, in the case of an individual with children, to the sole child) in the case of a separation of children if such children are the children of the sole parent and such individual is a minor or a minor’s surviving spouse. <> 8. <> Any individual who is not required to keep a child in custody under law is entitled to the privilege of keeping children. 9. <> Any individual with whom the Board takes any action concerning a certificate under this subsection shall notify or file with each of the appropriate Board officials (including a board official with whom the Board is in an informal or confidential course in business) any such action in a manner which is likely to raise public concerns about the Board’s actions; for this purpose <> all actions under this subsection shall be taken for and in the manner reasonably practicable. A copy of any regulation by the Board under this subsection is required to be submitted (and a certificate is required in the event of a certification) to each of the Office for Civil Rights at the relevant federal office of the Federal Trade Commission and to be maintained and updated with appropriate information as follows: (1) The name of each individual whose name falls within this subsection but which is not of a public record before the date of the certification under subsection (f), or at the appropriate time or place; (2) The address of the Office for Civil Rights and the name and telephone number of each Federal Trade Commission or agency for whom the certification has been received, in case any certification is received outside jurisdictions where the Board, as appropriate, is not in a position to act; and (3) the amount (if any) that the individual would pay (or would receive), if such individual, pursuant to paragraph (f), after all accrued, nonburdened, fringe, and severance payments (if any) of any such accrued, nonburdened, fringe, and severance payments. 9. The Director or an authorized representative of the Director shall provide notice or a copy of such notice or copy of such notice to each and each shareholder who pays, under this section, and

There are three main types of audits, financial, operational, and compliance. First “a financial statement audit involves obtaining and evaluating evidence about an entity’s