...Generally Accepted Auditing Standards Joey Wines Franciscan University Generally Accepted Auditing Standards Generally Accepted Auditing Standards, also known as GAAS, is a rather broad topic with many guidelines to follow. An independent auditor plans, conducts, and reports the results of an audit in accordance with generally accepted auditing standards. A short definition of GAAS is the set of systematic guidelines used by auditors when conducting audits on companies' finances, ensuring the accuracy, consistency and verifiability of auditors' actions and reports (Investopedia). There are a total of 10 standards that are broke up into three main sections. These three sections include the general standards, standards of fieldwork and standards of reporting. Each section is littered with requirements that the auditor and the subject company must meet (Investopedia). In short, an auditor must adequately plan the audit in advance, be independent of the client at all times, and always obtain reliable evidence (Investopedia). The companies must present their financial statements in accordance with GAAP, remain consistent in their reporting, and explicitly disclose all pertinent information (Investopedia). Auditing procedures differ from auditing standards. Auditing procedures are acts that the auditor performs during the course of an audit to comply with auditing standards. The first section I will talk about for the Generally Accepted Auditing Standards are the general standards...
Words: 1470 - Pages: 6
...Generally Accepted Auditing Standards ACC/490 June 25, 2012 Generally Accepted Auditing Standards The auditing and accounting profession has various standards and regulations that must be followed. The standards and regulations were put into place to ensure that reports are unbiased and accurate. The Generally Accepted Auditing Standards create stipulations on the accuracy, consistency, and verifiability of the information. The Sarbanes-Oxley Act of 2002 and the Public Company Accounting Oversight Board has standards in place to regulate financial reporting and ensure accuracy. The Generally Accepted Auditing Standards is “a set of systematic guidelines used by auditors when conducting audits on companies’ finances, ensuring the accuracy, consistency and verifiability of auditors’ actions and reports” (Investopedia, 2012. p. 1). Following the guidlelines set forth by the Generally Accepted Auditing Standards allows auditors to reduce the chance of overlooking information. The Generally Accepted Auditing Standards are divided into three sections: general standards, standards of fieldwork, and standards of reporting. Each of these three sections has specific standards an auditor must follow for each step in the auditing process. The general standards address the auditor’s qualifications and the standards that are required. The general standards require that the audit must be performed by a qualified individual who has received the proper training. The auditor...
Words: 832 - Pages: 4
...Generally Accepted Auditing Standards Paper Gary Varnell University of Phoenix ACC 490 Auditing Aaron Strenkoski July 11, 2011 Introduction This paper is designed to explain the nature and functions of auditing, relate these functions to the audit functions of the Shawnee News-Star, describe the elements that make up the Generally Accepted Auditing Standards and how these standards apply to financial, operational, and compliance audits. This paper will also explain the effect that the Sarbanes-Oxley Act of 2002 as well as the Public Company Auditing Oversight Board (PCAOB) will have on the audits of companies that are publicly traded, and will also discuss the additional requirements that are placed on auditors as a result of the Sarbanes-Oxley Act as well as the actions of the PCAOB. Auditing is defined as “ a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users” (Boynton & Johnson 2006, p. 6). The auditing process begins with the auditor obtaining information of an entity and evaluating, in an unbiased manner, this information as it relates to the processes, economic transactions and procedures of the entity. When evaluating this information, the auditor must ensure that the information complies with Generally Accepted Accounting Principles (GAAP) and any...
Words: 1122 - Pages: 5
...Generally Accepted Auditing Standards Auditing is a vital role within for-profit organizations, non-profit organizations, government, and the economy. With many standards, rules, procedures, and regulations placed on auditing financial reports for organizations, one would obtain an understanding as to the Generally Accepted Auditing Standards (GAAS). These GAAS were collaborated by members of the American Institue of Certified Public Accounting (AICPA) in the 1940's. In the 1940's, three guidelines to include General Standards, Standards of field work, and Standards of reporting. Each of these topics includes details as to the "flow" of the auditing process. After the Sarbanes-Oxley Act of 2002, (SOX), the regulations were increased with detail, and offered more insight as to the consequences of not following the "rules". The Public Company Accounting Oversight Board, (PCAOB), obtained more duties to assist in reviewing material relevant to auditing and auditors. One of the points one may find interesting is the importance of the regulations lack of required documentation. Rather than placing detailed requirements on included reports it lays a framework of guidelines of which to include, and what material needs to be disclosed. The main purpose for the regulations is to promote full disclosure and transparency, a common element which was missing prior. Commonly, many find the regulations to apply to for-profit and publicly traded organizations, however; many are inclusive...
Words: 737 - Pages: 3
...Generally Accepted Auditing Standard Paper ACC/491 Generally Accepted Auditing Standards Paper Auditing is defined as “a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users” (Louwers, Ramsay, Sinason, & Stawser, p. 3). This is basically saying that auditors are given the job of ensuring that all processes are recorded correctly and obtained for the required amount of time. I will discuss the nature and functions of auditing, while giving examples from my current employer, Capital One. I will then describe the elements of the Generally Accepted Auditing Standards, and also tell how these standards apply to financial, operational and compliance audits. I will explain the effect that the Sarbanes-Oxley Act of 2002 and the Public Company Accounting Oversight Board will have on audits on publicly traded companies. Last, I will discuss the additional requirements that are placed on auditors from the Sarbanes-Oxley Act and the actions of the Public Company Accounting Oversight Board. The auditing process can be very tedious. As an auditor, you must pay close attention to detail. As a Lead Teller with Capital One, I have the responsibility of not only ensuring that all processes are done correctly and retained for the amount of time specified by the company...
Words: 695 - Pages: 3
...Suretta Smith ACC/491 Generally Accepted Auditing Standards Paper September 25, 2012 Instructor: Santos Alarcon, Jr. Abstract The purpose of this paper will be to describe the nature and functions of auditing. The following will be addressed in this paper: description of the elements of the Generally Accepted Auditing Standards (GAAS), description how these standards apply to financial, operational, and compliance audits, explanation of the effect that the Sarbanes-Oxley Act of 2002, and the Public Company Accounting Oversight Board (PCAOB), will have on audits of publicly traded companies and the discussion on the additional requirements that are placed on auditors from this Act, and the actions of the PCAOB. The generally accepted auditing standards (GAAS) were implemented by the Public Company Accounting Oversight Board (PCAOB), in April of 2003. The standards were also adopted by the Auditing Standards Board of the American Institute of Certified Public Accountants, which consists of ten standards that establishes the framework for conducting audits. However, the auditing standards are not detailed but guidance on what should be included in the financial statements (Boynton & Johnson, 2006). The GAAS consist of three categories that incorporate the ten standards which are general standards, standards of field work, and standards of reporting. General standards. under the general standards category, it informs about the characteristics of adequate...
Words: 1038 - Pages: 5
...Individual Assignment, Generally Accepted Auditi Purchase here http://chosecourses.com/acc-491-week-1-individual-assignment-generally-accepted-auditi Description ACC 491 Week 1, Individual Assignment, Generally Accepted Auditing Standards ACC 491 Week 1, Individual Assignment, Generally Accepted Auditi Purchase here http://chosecourses.com/acc-491-week-1-individual-assignment-generally-accepted-auditi Description ACC 491 Week 1, Individual Assignment, Generally Accepted Auditing Standards ACC 491 Week 1, Individual Assignment, Generally Accepted Auditi Purchase here http://chosecourses.com/acc-491-week-1-individual-assignment-generally-accepted-auditi Description ACC 491 Week 1, Individual Assignment, Generally Accepted Auditing Standards ACC 491 Week 1, Individual Assignment, Generally Accepted Auditi Purchase here http://chosecourses.com/acc-491-week-1-individual-assignment-generally-accepted-auditi Description ACC 491 Week 1, Individual Assignment, Generally Accepted Auditing Standards ACC 491 Week 1, Individual Assignment, Generally Accepted Auditi Purchase here http://chosecourses.com/acc-491-week-1-individual-assignment-generally-accepted-auditi Description ACC 491 Week 1, Individual Assignment, Generally Accepted Auditing Standards ACC 491 Week 1, Individual Assignment, Generally Accepted Auditi Purchase...
Words: 408 - Pages: 2
...Nature and Functions of Auditing August 31st, 2012 Write a 700- to 1,050-word paper in which you explain the nature and functions of auditing. Relate your explanation to the audit functions in your organization, or an organization with which you are familiar. In your paper, be sure to address the following: • Describe the elements of the Generally Accepted Auditing Standards (GAAS). • Describe how these standards apply to financial, operational, and compliance audits. • Explain the effect that the Sarbanes-Oxley Act of 2002, and the Public Company Accounting Oversight Board (PCAOB), will have on audits of publicly traded companies. Discuss the additional requirements that are placed on auditors from this Act, and the actions of the PCAOB. This paper discusses the nature and functions of auditing addressing the elements of the Generally Accepted Auditing Standards (GAAS), how these standards apply to financial, operational, and compliance audits, the effect that the Sarbanes-Oxley Act of 2002 (SOX) and the Public Company Accounting Oversight Board (PCAOB) will have on audits of publicly traded companies, and the additional requirements that are placed on auditors from SOX and PCAOB. Nature and Functions of Audit Auditing is a systematic process of obtaining and evaluating evidence regarding assertions about economic actions, events and processes wherein evaluations are made and verified as true and correct. The auditing process consists of gathering...
Words: 439 - Pages: 2
...Chapter 2 The CPA Profession Review Questions The four major services that CPAs provide are: 1. Audit and assurance services Assurance services are independent professional services that improve the quality of information for decision makers. Assurance services include attestation services, which are any services in which the CPA firm issues a report that expresses a conclusion about the reliability of an assertion that is the responsibility of another party. The four categories of attestation services are audits of historical financial statements, attestation on the effectiveness of internal control over financial reporting, reviews of historical financial statements, and other attestation services. Accounting and bookkeeping services Accounting services involve preparing the client's financial statements from the client's records. Bookkeeping services include the preparation of the client's journals and ledgers as well as financial statements. Tax services Tax services include preparation of corporate, individual, and estate returns as well as tax planning assistance. Management consulting services These services range from suggestions to improve the client's accounting system to computer installations. 2-1 2. 3. 4. 2-2 The major characteristics of CPA firms that permit them to fulfill their social function competently and independently are: 1. Organizational form A CPA firm exists as a separate entity to avoid an employer-employee relationship with its clients...
Words: 3111 - Pages: 13
...Generally Accepted Auditing Standards Paper Name Institution Generally Accepted Auditing Standards Paper Recently, the need for enhanced auditing regulations has increased. This has been orchestrated by the demand from the public for an increase in the regulation of corporate accounting. In particular, following a number of scandals that have befallen major companies leading to their bankruptcy, investors have been keen on the auditing standards as they do not wish to risk their money. The aim of this paper is to discuss the elements of GAAS, as a set of auditing standards that are generally used in the U.S.A. The paper will specifically examine how these standards are applied in financial and compliance audits. It will also highlight the impact that the PCAOB and SOX have had on the auditing of public companies. The extra requirements imposed on auditors by the PCAOB and the SOX will also be discussed. In the later years of 1940, members of the AICPA, an institution tasked with overseeing accounting standards in the U.S. then, came up with a number of standards that were to be used by auditing professionals (Kinyo, 2013). The standards were afterward included into Statements on Auditing Standards, commonly known by the abbreviation, SAS. They consist of ten generally accepted standards for auditing, which are categorized into three groups. The first category consists of general...
Words: 952 - Pages: 4
...Generally Accepted Auditing Standards 43 AU Section 150 Generally Accepted Auditing Standards (Supersedes SAS No. 1, section 150.) Source: SAS No. 95; SAS No. 98; SAS No. 102; SAS No. 105; SAS No. 113. Effective for audits of financial statements for periods beginning on or after December 15, 2001, unless otherwise indicated. .01 An independent auditor plans, conducts, and reports the results of an audit in accordance with generally accepted auditing standards. Auditing standards provide a measure of audit quality and the objectives to be achieved in an audit. Auditing procedures differ from auditing standards. Auditing procedures are acts that the auditor performs during the course of an audit to comply with auditing standards. Auditing Standards .02 The general, field work, and reporting standards (the 10 standards) approved and adopted by the membership of the AICPA, as amended by the AICPA Auditing Standards Board (ASB), are as follows: General Standards 1. The auditor must have adequate technical training and proficiency to perform the audit. 2. 3. The auditor must maintain independence in mental attitude in all matters relating to the audit. The auditor must exercise due professional care in the performance of the audit and the preparation of the report. Standards of Field Work 1. The auditor must adequately plan the work and must properly supervise any assistants. 2. The auditor must obtain a sufficient understanding of the entity and its environment, including...
Words: 1607 - Pages: 7
...responsible for establishing auditing standards for audits of public companies? Who is responsible for establishing auditing standards for private companies? Explain. A. For public companies, the standards are established by the PCAOB, whereas the standards for all non-public entities are set by the Auditing Standards Board of the AICPA. The split between public and private entities occurred as a result of the passage of the Sarbanes-Oxley Act which set up the PCAOB. 2-10 (Objective 2-6) Generally accepted auditing standards have been criticized by different sources for failing to provide useful guidelines for conducting an audit. The critics believe the standards should be more specific to enable practitioners to improve the quality of their performance. As the standards are now stated, some critics believe that they provide little more than an excuse to conduct inadequate audits. Evaluate this criticism of the 10 generally accepted auditing standards. B. The standards are provided as a minimum standard, not a maximum, and auditors are encouraged to strive for more. The concern for more specificity in the standards is that it could turn into a mechanistic process of data gathering, removing all professional judgment from the audit. The standards also need to have the flexibility to fit into the specific situation of a company, i.e., determination of sample size. 2-16 (Objective 2-6) The following questions deal with generally accepted auditing standards. Choose the best response...
Words: 1456 - Pages: 6
...Chapter 2 The CPA Profession ← Review Questions 2-1 The four major services that CPAs provide are: 1. Audit and assurance services Assurance services are independent professional services that improve the quality of information for decision makers. Assurance services include attestation services, which are any services in which the CPA firm issues a report that expresses a conclusion about the reliability of an assertion that is the responsibility of another party. The four categories of attestation services are audits of historical financial statements, attestation on the effectiveness of internal control over financial reporting, reviews of historical financial statements, and other attestation services. 2. Accounting and bookkeeping services Accounting services involve preparing the client's financial statements from the client's records. Bookkeeping services include the preparation of the client's journals and ledgers as well as financial statements. 3. Tax services Tax services include preparation of corporate, individual, and estate returns as well as tax planning assistance. 4. Management consulting services These services range from suggestions to improve the client's accounting system to computer installations. 2-2 The major characteristics of CPA firms that permit them to fulfill their social function competently and independently are: 1. Organizational form A CPA firm exists as a separate entity to avoid...
Words: 3093 - Pages: 13
...Assignment 1 Generally Accepted Auditing Standards Generally Accepted Auditing Standards | Action by Jones Resulting in Failure to Comply with Generally Accepted Auditing Standards | The auditor must have adequate technical training and proficiency to perform the audit. | Jones, CPA hired to students that did not have any experience. | The auditor must maintain independence in mental attitude in all matters relating to the audit. | Arthur Jones, CPA, accepted the offer of receiving a bonus if bank approves the loan. | The auditor must exercise due professional care in the performance of the audit and the preparation of the report. | Jones, CPA did not exercise “professional care in performance of the audit and preparation of the report” because he failed to follow the GAAP guidelines. There were no notes included within the report, students conducted the report without guidance etc. | The auditor must adequately plan the work and must properly supervise any assistants. | Jones did properly supervise the students. He only told them what to. He should have reviewed the information that the students prepared and ensured that Generally Accepted Auditing Standards were followed. | The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and...
Words: 543 - Pages: 3
...Audit and Assurance Services Chapter 1 1 Learning Objectives 1. What is auditing? Distinguish between auditing and accounting. Importance of auditing in reducing information risk. 2. Distinguish audit services from other assurance and non-assurance services provided by CPAs. 3. Three main types of audits. 4. How to become a CPA? Identify the primary types of auditors. 2 What is auditing? Evaluating 3 Nature of Auditing Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent person. 4 Audit Reporting -- (Expressing Opinions) The final stage in the auditing process is preparing the Audit Report, which is the communication of the auditor’s findings to users. 5 Information and Established Criteria To do an audit, there must be information in a verifiable form and some standards (criteria) by which the auditor can evaluate the information. 6 Accumulating Evidence and Evaluating Evidence Evidence is any information used by the auditor to determine whether the information being audited is stated in accordance with the established criteria. Transaction data Client inquiry Written and electronic Communications with outsiders Observations 7 Competent, Independent Person The auditor must be qualified...
Words: 2208 - Pages: 9
