Generally Accepted Auditing Standards
Jessica Lyle
ACC/491
February 17, 2014
Dwayne Thompson

The auditing process is an important part of the financial system. The auditing of a company provides a means of accountability, and it ensures that the financial information provided by the company is accurate. This is significant because investors use these financial statements in order to determine the value or financial health of a company. When conducting an audit, it is important to take into account the Generally Accepted Auditing Standards (GAAS). These standards for conducting an audit are used to ensure the validity of an audit of a company. Since there are many regulations that companies must follow for creating financial reports, there are also regulations that must be followed when it comes to audits. One such regulation is the Sarbanes-Oxley Act of 2002.
An audit can be described of as the obtaining and evaluation of evidence in order to determine the validity of assertions made by a given entity, and the reporting those results to interested parties. In a business setting, this would most easily be seen when a company is audited. When a company undergoes an audit, all of their records are examined to ensure that they correspond to the information provided in the company’s financial reports. This is important to investors because it ensures the legitimacy of a company’s financial report, which can be used to determine the economic health of the company. When performing an audit, it is important to abide by the guidelines set by the Generally Accepted Auditing Standards (GAAS).
The GAAS has 10 generally accepted standards associated with public accounting. These standards have been around since the 1940’s, and were instituted by the members of the AICPA. These 10 standards are further broken down into three main categories, and they are