Generally Accepted Auditing Standards: Three Categories and Ten Standards
Generally Accepted Auditing Standards
ACC/491 Contemporary Auditing 1
March 27, 2014
Richard A Cochran
Generally Accepted Auditing Standards Generally Accepted Auditing Standards, also known as GAAS, are the most acknowledged auditing standards known. GAAS relates to the conduct of individual audit engagements and are a set of standards in which quality of audits are performed and may be judged. The American Institute of Certified Public Accountants (AICPA) has a division called the Auditing Standards Board which publicizes the GAAS standards in the United States. There are three categories of GAAS with 10 standards known to date (Boynton & Johnson, p. 50, 2006).
Elements of the Generally Accepted Auditing Standards (GAAS)
The first category in GAAS is General Standards. Under this category, an auditor must:
1. Have acceptable training in the technical field. The competency of the auditor has three factors: (1) university education, (2) practical training and experience, and (3) continuing education throughout the auditor’s career.
2. An independence in mental attitude is crucial to the audit and will reduce the lack of judgment.
3. Professionalism is to be exercised in the performance throughout the planning, testing and reporting. Any of all issues should be let known in the final report.
In the second category, Standards of Field Work, the auditor is required to:
1. Plan his or her work adequately and supervise any assistance that may help with the audit
2. Gain a sufficient understanding of the organization and the background of the company. Gain the knowledge of the company’s internal control, evaluate any risk regarding the financial statement misstatement whether due to fraud or error, and make a note for future auditors if there could be recurring problems and provide an analysis of the situation so future audits can recheck the issues.
3. Acquire sufficient audit evidence through audit procedures
ACC/491 Contemporary Auditing 1
March 27, 2014
Richard A Cochran
Generally Accepted Auditing Standards Generally Accepted Auditing Standards, also known as GAAS, are the most acknowledged auditing standards known. GAAS relates to the conduct of individual audit engagements and are a set of standards in which quality of audits are performed and may be judged. The American Institute of Certified Public Accountants (AICPA) has a division called the Auditing Standards Board which publicizes the GAAS standards in the United States. There are three categories of GAAS with 10 standards known to date (Boynton & Johnson, p. 50, 2006).
Elements of the Generally Accepted Auditing Standards (GAAS)
The first category in GAAS is General Standards. Under this category, an auditor must:
1. Have acceptable training in the technical field. The competency of the auditor has three factors: (1) university education, (2) practical training and experience, and (3) continuing education throughout the auditor’s career.
2. An independence in mental attitude is crucial to the audit and will reduce the lack of judgment.
3. Professionalism is to be exercised in the performance throughout the planning, testing and reporting. Any of all issues should be let known in the final report.
In the second category, Standards of Field Work, the auditor is required to:
1. Plan his or her work adequately and supervise any assistance that may help with the audit
2. Gain a sufficient understanding of the organization and the background of the company. Gain the knowledge of the company’s internal control, evaluate any risk regarding the financial statement misstatement whether due to fraud or error, and make a note for future auditors if there could be recurring problems and provide an analysis of the situation so future audits can recheck the issues.
3. Acquire sufficient audit evidence through audit procedures
References: Boynton, W.C., & Johnson, R.N. (2006). Modern Auditing; Assurance Services and the Integrity of Financial Reporting (8th ed.). Retrieved from The University of Phoenix eBook Collection.