March 28, 2008
Generally Accepted Auditing Standards
Generally 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,...