The generally accepted auditing standards (GAAS) were created to focus on audits of an entity’s financial statements. Auditors are responsible for expressing an opinion as to whether or not an entity is presenting the financial statements in accordance with GAAS standards. In order for an entity’s financial statements to meet GAAS standards, the information provided throughout the financials’ has to be consistent with the GAAS standards.
There are three elements of GAAS, the general standards, standards of field work, and the standards of reporting. The general standards are those that “relate to the qualifications of the auditor and to the quality of the auditor’s work.” (Boynton, 2006) Auditors are to have adequate training, be competent, work independently, and work with due professional care. With the proper education, training, and experience and auditor can gain the necessary knowledge that is required to work efficiently without influence from the manager of the company that is being audited.
The second element, standards of field work, pertains to “primarily the conduct of an audit at the entity’s place of business.” (Boynton, 2006) In the field work, proper planning of an audit strategy, as well as the designing of an audit program will ensure that an audit goes smoothly for an entity. However, an auditor must have knowledge of the entity and how it operates in order to be able to efficiently conduct an audit. This knowledge will allow the auditor to be able to understand why an entity’s financial paperwork contains the information that it does, and be able to for a reasonable opinion with regards to the entity’s financial statements.
The third element, standards of reporting, pertains to the requirements of reporting in order to meet GAAS standards. The auditor must be able to identify generally accepted accounting principles (GAAP), make sure that consistency of GAAP is upheld through the financial statements, review...