Generally Accepted Auditing Standards

488 Words2 Pages
Generally Accepted Auditing Standards Angela Ingels ACC/491 January 21, 2013 Laurence House There are many standards, rules, procedures, and regulations to follow when auditing financial reports for companies. Most of these were set into place by the Generally Accepted Auditing Standards (GAAS). In the 1940’s, members of the American Institute of Certified Public Accounting (AICPA) developed the ten generally accepted auditing standards for auditing professionals. The standards are split into three categories. 1. General Standards a. Audits have to be done by a trained or proficient auditor b. Assignments must be approached with an independence in mental attitude c. Take professional care that is exercised 2. Standards of field work d. All work must be planned and adequately supervised e. To assess the risk of material misstatements, the entity must be understood f. Competent audit evidence must be obtained through auditing procedures performed to afford a reasonable basis of an opinion. 3. Standards of reporting g. Report whether the financial statements are presented in accordance with generally accepted accounting principles h. Report the circumstances in which principles have not been consistently observed in the current period i. Informative disclosures in the financial statements are to be reasonably adequate j. Report an expression or opinion regarding financial statements. Financial audits are performed in coordination with GAAP and other established criteria when obtaining evidence about a company’s presentation of its financial position. Most states have developed laws that say only certified public accountants (CPAs) can perform financial statement audits. Many corporations hire external auditing firms to obey these laws. Operational Audits
Open Document