April 13, 2010
Generally Accepted Auditing Standards Paper
The Generally Accepted Auditing Standards (GAAS) have been developed by the Public Company Accounting Oversight Board (PCAOB), for public companies, and the American Institute of Certified Public Accountants (AICPA), for nonpublic companies, to guide the practice of auditing within the public accounting profession in the United States. Generally Accepted Auditing Standards (GAAS) are those guidelines which auditors must adhere to while conducting an audit of a company's or government entity's financial statements. Companies need to be compliant to ensure that their gains and losses are computed correctly. It must also be stated in the audit report that the audit was conducted following Generally Accepted Auditing Standards. The following paper will explain the elements of GAAS and how GAAS is applied to audits.
Elements of GAAS
The AICPA developed three categories of standards that are to be followed by auditors. These categories are general, fieldwork, and reporting standards.
General Standards are mainly a guide in selecting and training its professional to meet the public trust. Under this standard are technical training and proficiency, independence from the client, and the exercise of due professional care.
Fieldwork Standards are used to set the framework for the performance of the audit. This standard focuses on the planning of the audit, the framework for evaluating audit risk and guidance on specific procedures that must be performed on every audit engagement.
Reporting Standards are concerned with whether the financial statements are presented in accordance with GAAP, consistency, informative disclosures, and an expression of opinion on the financial statements that have been audited. The audit report must state whether the financial statements have been prepared in conformity with GAAP... [continues]
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