Generally Accepted Auditing Operating Standards

¶ … Auditing Operating Standards

According to the article, GAAS were eight standards written as short statements. Over the years, it is shown that the eight standards have been integrated by further requirements and explanations in the CICA recommendations handbook. The statements have been reformed to incorporate professional ethical requirements to govern relevant accounting organizations. These amendments have been made consistent with the international standards (American Institute of Certified Public Accountants, 2009). GAAS is an independent body aiming to conduct audits in accordance with the American Auditing Standards. It establishes the overall responsibility of auditors in the process of conducting audits. GAAS provides a series of concepts and principles, and a list of audits fundamental to auditing financial statements. Therefore, GAAS can be defined as sets of standards from which quality of audits is judged or may be performed.

Purpose of GAAS

The purpose of GAAS is to identify the key principles and objectives of auditing financial statement. These standards have been written to identify the objectives and subject of standard, provide requirements for meeting objectives, give additional explanation for actualizing those requirements and furnish new definitions wherever necessary. Additional explanations may include illustrations of appropriate procedures for defined contexts. The standards are organized to parallel the critical thinking concepts under professional judgment. The goal of GAAS is to create a set of standards, which are logically organized and to communicate the reasoning of these standards to auditors (Delaney & Feller, 2011). If an audit fails to achieve a relevant GAAS objective, auditors must consider if the overall objectives of the audits, as stipulated in GAAS can be attained. The GAASs are issued regularly. The goals are consistent with the overall GASS objectives. For the purpose of all practices, such consistencies ensure that each GAAS goal is realized. Any auditor of financial statements who fails to abide by the GAAS guidelines could be judged as performing deficient audits.

Ten GAAS by major category

There are 10 GAAS standards: three fieldwork standards, three general standards and four reporting standards.

General

I. Auditors should have sufficient proficiency and technical training to conduct audits

II. Auditors ought to maintain independence of their mental attitudes in all issues pertaining to the audits

III. Auditors should practice maximum professionalism when performing the audits and preparing auditing reports

Fieldwork standards

I. Auditors must sufficiently plan their work and appropriately supervise any assistants

II. Auditors should acquire an adequate understanding of entities and their environments. This includes assessing statements of risk materials whether due to fraud or error, checking internal controls and designing the timing, nature and extent of additional audit procedures (Giove, 2012).

III. Auditors should acquire adequate proper audit evidence by conducting procedures of auditing to have a reasonable ground for opinions about financial statements being audited

Reporting standards

I. Auditors are required to state in their auditors' reports if the financial statements are in line with the principles of GAAS