Essay on Generally Accepted Auditing Standards

Submitted By tuosbl
Words: 681
Pages: 3
Open Document
Generally Accepted Auditing Standards (GAAS) are the most identifiable auditing standards. They are ten broad statements that are used as guidance when conducting audits. These standards provide a measure of quality and ensure the accuracy of an audit. The 10 GAAS are grouped into three categories; General Standards, Standards of Field Work and Standards or Reporting.
According to chapter 2 in the text, general standards relates to the qualifications of the auditor and to the quality of the auditors work. There are three general standards. The first general standard is “Adequate Technical Training and Proficiency.” This general standards declares each professional accountant, must have the required formal education for entry into the profession. Sufficient training and experience in the field, and each professional must continue with their professional education throughout their career as mandated.
The second general standard is called “Independence in Mental Attitude.” The auditor must be free of any influence other than their own professional judgment. An auditor is renowned to be an unbiased expert. Managements influence should have no bearing on the conduction of the audit or the reporting of the findings. Auditors are also required to meet the independence requirements in the AICPA’s Code of Professional Conduct.
The last general standard is known as, “Due Professional Care.” An auditor vows to act in good faith and to not be careless in an audit. All work done by those less experienced should be reviewed. No audits should be taking lightly and all should be cautiously completed.
The second category the generally accepted auditing standards are grouped into is known as “standards of field work.” They concern the demeanor of the audit. The first standard in this category and fourth out of the ten is called “Adequate Planning and Proper Supervision.” You would expect to have the most memorable party of the year without planning months prior, right? Same goes for auditing, in order for the audit to be both effective and efficient, it must be properly planned. Many times large portions of the audit are done by less experience staff, GAAS requires the audit to have appropriate supervision.
Next: “understanding the entity and its environment, including internal control.” There are several factors that influence the risk of material misstatement, whether due to error or fraud. It is essential for the auditor to understand the entity and its environment. According to chapter two in the text this standard require the auditor to understand the entities industry, regulatory, and other external factors. An auditor must understand the nature of the entity, the entities objectives and strategies and related business risks as well as its risks assessment. The entities measurement and review of financial performance and lastly, the auditor must
Show More

Related Documents: Essay on Generally Accepted Auditing Standards

Question 1 Essay

the compliance of a company's financial statements with Generally Accepted Accounting Principles (“GAAP”) based on the auditor's work performed under Generally Accepted Auditing Standards (“GAAS”) ABSTRACT This is a discussion that focuses on GAAP and GAAS standards of auditing. It is a write up that tackles important factors in the auditing field and ensures that there is an emphasis on following the preset standards in auditing and confidence in opinion of the audit. It also touches…

Words 641 - Pages 3

GAAP Standards Essay example

ACC 491 September 9, 2013 Getachew Wakgira Generally Accepted Auditing Standards Paper The general function of an audit is defined as: an official inspection of an individual or organization's accounts, typically by an independent body; a systematic review or assessment of something. When applied to the business world an auditor can provide a number of services. An auditor can examine objectively an organizations financial statements and express an opinion of the fair representation of those…

Words 811 - Pages 4

Acc 490 Week 1

Week 1 Paper Auditing Standards Amy Jarvis ACC 490 Febuary 23, 2015 Looking into the Generally Accepted Auditing Standards there are 10 different type of elements that is associated with the Generally Accepted Auditing Standards which are separated into three different categories such as the general standards, standards of field work, and standards of reporting. In the general standards categories you have three elements, the auditor must have technical training, maintain independence…

Words 682 - Pages 3

ACC 491 Week 2 DQ 1 Essay

information should the auditor consider during engagement planning? How will this information affect the scope of the audit? Business - General Business ACC 491 Week 1 Individual Generally Accepted Auditing Standards Paper ACC 491 Week 2 Individual Assignments From the Text ACC 491 Week 2 Learning Team Auditing, Attestation, and Assurance Services Paper ACC 491 Week 3 Individual Assignments From the Text ACC 491 Week 3 Learning Team Assessing Materiality and Risk Simulation…

Words 448 - Pages 2

Auditing Essay

Brief Description of Generally Accepted Auditing Standards Sally Jones' Actions Resulting in Failure to Comply with Generally Accepted Auditing Standards General Standards: 1. The auditor must have adequate technical training and proficiency to perform the audit. 1. It was inappropriate for Jones to hire the two students to conduct the audit. The examination must be conducted by persons with proper education and experience in the field of auditing. Although a junior assistant…

Words 1410 - Pages 6

Essay on audit letter week 1

Auditing Introduction Letter Paula Strahl ACC/546 Jacob Matthews May 24, 2015 May 24, 2015 Larry Lancaster Chairman of the Board of Directors, President and CEO Dear Mr. Lancaster, Thank you for your interest in our services at Anderson, Olds, and Watershed CPAs, LLC. We value your business and will strive to meet all of your expectations. Our firm offers various types of auditing services, including operational, compliance, and financial audits, as well as several attestation services…

Words 944 - Pages 4

To The Board Of Directors Of Apollo Shoes, Inc.

the fairness in which Apollo Shoes, Inc. presents information in all material respects, the financial position, results of operations, and cash flows in conformity with accounting principles generally accepted. The audit will be conducted in accordance to generally accepted auditing standards. These standards do not require absolute assurance that the report is completely free of material misstatements caused by error or fraud; this instead is based on a level of reasonableness. My team has organized…

Words 577 - Pages 3

The Role Of The Public Accountant In The American Economy

CHAPTER 1 The Role of the Public Accountant in the American Economy Review Questions 1-1 The “crisis of credibility” largely arose from the number of companies that restated their previously issued financial statements as a result of accounting irregularities and fraud. Especially responsible were the very visible Enron and WorldCom fraud cases. Both companies filed for bankruptcy and constituted the largest companies in American history to do so. The extent of the accounting irregularities…

Words 5490 - Pages 22

Business Plan Essay

produces past-oriented reports, it is based on generally accepted accounting principles and generally accepted accounting practices compliant with International Financial Reporting Standards/US GAAP. In order to prepare the financial accounts/reports an entity has to comply with these GAAPs and gaaps. Which of these accounting practices and principles the board of directors choose at the start of the financial period and whatever changes in these generally accepted accounting principles and practices are…

Words 1955 - Pages 8

Audit Intro Letter Essay

great pleasure here at Anderson Olds and Watershed that we provide you with valuable information pertaining to our auditing services. This memo will provide information in regards to our auditing and assurance services and explain my role in providing these services. I will also describe any requirements for meeting the professional standards and the ethical implications to these standards. At Anderson, Olds and Watershed (AOW) we understand the need for our professional services and expertise to…

Words 1104 - Pages 5