Generally Accepted Auditing Standards (gaas)
Generally Accepted Auditing Standards
Theree are guidelines auditors must follow while creating audit reports. These standards are organized rules and guidelines that are included in the Generally Accepted Auditing Standards. Members of The American Institute of Certified Public Accountants (AICPA) created ten standards for the auditing professionals which were known as Statements on Auditing Standards. These standards were then divided into three categories; general standards, standards for fieldwork, and standards for reporting.
The first group of standards is general standards. General standards identify the qualifications for the auditor performing the audit and the quality of the auditor’s work. There are three factors that define the auditor’s competency. The first factor is if the auditor received formal university education for entry into the auditing profession. The second factor is if the auditor received practical training and experience in the auditing profession. The third factor is if the auditor received continuing professional education during their professional career. Not only must an auditing professional be knowledgeable and proficient in their work, they must also be free and independent of the firm they are auditing. The auditor must also perform the audit and perform their duties with due professional care. An auditor must concentrate and be truthful and straightforward with their findings while performing the audit.
The second group of standards is Standards of Fieldwork. Standards of Fieldwork shows to an auditor how to perform an audit with efficiency and effectiveness. In order for the audit to be done efficiently and effectively, it must be sufficiently planned and executed. The audit must be conducted with planning to ensure the conduct of the audit. The staff assistants must have proper supervision while assisting on an audit. Many of them will have some level of experience, but it will still be limited and in order for the conduct of the audit to be carried through, supervision by senior staff is essential. The auditor must also understand the client’s business and its operations to prevent misstatements. The auditor needs to analyze the business’s internal controls and detect any items of material misstatements. The auditor must analyze the financial statements of the business and provide sufficient evidence to support the audit opinion.
The last group of standards is Standards of Reporting. Standards of Reporting are used to ensure that the auditor properly reports their findings from the audit. The auditor must disclose if the financial statements are in accordance with GAAP. The auditor must then report of any inconstancies in the financial statements where the financial statements are not in accordance with GAAP. The next is to ensure that the notes to the financial statements have enough information to support the financial statements.