AUTHORITATIVE LITERATURE USED IN AUDITING (STUDY OBJECTIVE 4)The work of an auditor must be conducted in accordance with several sources of authoritative literature, as described next. Show
Generally accepted auditing standards (GAAS) are broad guidelines for an auditor's professional responsibilities. These ten standards are divided into three categories that include general qualifications and conduct of an auditor (general standards), guidelines for performing the audit (standards of fieldwork), and requirements for the written report communicating the results of the audit (standards of reporting). Exhibit 7-1 summarizes these standards by category.  Exhibit 7-1 Generally Accepted Auditing Standards GAAS provides a general framework for conducting quality audits, but this framework is not specific enough to provide useful guidance in the actual performance of an audit engagement. For such detailed guidance, auditors rely upon standards issued by the Public Company Accounting Oversight Board, the Auditing Standards Board, the International Auditing and Assurance Standards Board, the Internal Auditing Standards Board, and the Information Systems Audit and Control Association. The Public Company Accounting Oversight Board (PCAOB) was organized in 2003 for the purpose of establishing auditing standards for public companies in the United States. These standards are to serve as interpretations ... The generally accepted auditing standards (GAAS) are the standards you use for auditing private companies. GAAS come in three categories: general standards, standards of fieldwork, and standards of reporting. Keep in mind that the GAAS are the minimum standards you use for auditing private companies.
Additionally, the Public Company Accounting Oversight Board (PCAOB) has adopted these standards for public (traded on the open market) companies. Each audit engagement you work on may require you to perform audit work beyond what’s specified in the GAAS in order to appropriately issue an opinion that a set of financial statements is fairly presented. You need to use professional judgment and exercise due care in following all standards. General standards: The first
three GAAS are general standards that address your qualifications to be an auditor and the minimum standards for your work product: As an auditor, you must have both adequate training and proficiency. You are independent in both fact and appearance. You exercise due professional care in performing your auditing tasks. Standards of fieldwork: The next three GAAS govern how you actually do your job:
Standards of reporting: The last four GAAS concern information you must consider prior to issuing your audit report:
About This ArticleThis article is from the book:
About the book author:Maire Loughran is a self-employed certified public accountant (CPA) who has prepared compilation, review, and audit reports for fifteen years. Additionally, she is a university professor of undergraduate- and graduate-level accounting classes. This article can be found in the category:
What are Generally Accepted Auditing Standards?Generally Accepted Auditing Standards generally termed as GAAS is a step by step guideline that auditors use while performing audits. The audits are of the financial records of the companies. They make sure that the audit is conforming correctness and compatibility. They submit the detailed report of the auditors so that their performance can be verified. The AICPA (American Institute of Certified Public Accountants) formed a board, commonly called ASB (Auditing Standards Board). This board introduced GAAS.
How are Generally Accepted Auditing Standards Used?GAAS (Generally Accepted Auditing Standards contains ten standards, which have the following 3 categories:
Standards of Field WorkThe Standards of Field Work ensure that the auditors do proper planning on how to work. They should supervise the helpers in an appropriate manner. They should have enough understanding of the business entity and the environment of the company. It includes internal control because there is a risk of a wrong statement or misinformation of the financial statements. There can be any reason for that, such as mistakes in the record, fraud, etc. The auditors must understand the timing, regular audit reports and nature of the records. They should conduct an audit systematically to get enough evidence properly. Then, they are able to give their opinion on the financial statements after auditing. Standards of ReportingThe auditors have to state in the report that the financial statements comply the Generally Accepted Accounting Standards or not. They also have to identify the cases or instances in which the company has not followed the rules and the current record is not consistent with the previous one. If the auditor finds that the company does not disclose the information adequately, he must mention it in the audit report. Either the auditor has to state in the report his opinion about the financial statements or mention that he cannot express his opinion in the report. In the latter case, the auditor must explain why he cannot express his opinion about the financial statements of the company. The name of the auditor is linked with financial statements. So, he must clearly point out the function performed by him. Also, he should mention in the report about the extent of responsibility he has taken. What are the three major categories of audit standards?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 are the types of audit standards?Types Of Audits Companies Conduct. Internal audit. A team conducts an internal audit within the organisation to determine whether the organisation is functioning as per the regulations. ... . External audit. ... . IRS tax audit. ... . Financial audit. ... . Operational audit. ... . Information system audit. ... . Payroll audit. ... . Pay audit.. What generally accepted auditing standards?Generally accepted auditing standards (GAAS) are a set of systematic guidelines used by auditors when conducting audits on companies' financial records. GAAS helps to ensure the accuracy, consistency, and verifiability of auditors' actions and reports.
What does Category 3 of the Pcaob auditing standards related to?Results of auditing procedures that indicate a need for significant modification of planned auditing procedures, the existence of material misstatements (including omissions in the financial statements), the existence of significant deficiencies, or material weaknesses in internal control over financial reporting.
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What three categories are generally accepted auditing standards divided into?
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