Generally Accepted Auditing Standards Essay

971 Words Jun 6th, 2008 4 Pages
Generally Accepted Auditing Standards
Heather Sheetz
Accounting 491
Julie Oldham
March 28, 2008

Generally Accepted Auditing Standards Generally Accepted Auditing Standards or GAAS 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” (Lexico Publishing Group, 2008). The following paper will explain the elements of GAAS and how GAAS is applied to audits. GAAS has three elements that must be used during every audit. They are general standards, standards of field work, and standards of reporting. Each of the three standards has their own set of rules that must be complied with during every audit.
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3. Sufficient competent audit evidence should be obtained through audit procedures performed to afford a reasonable basis for an opinion regarding the financial statements under audit. Standards of reporting are so named because it is the standards the auditor must follow when reporting his/her findings. There are four main sections in this standard, financial statements presented in accordance with GAAP, consistency in the application of GAAP, adequacy of informative disclosures, and expression of opinion. The main points of this standard can also be summed up by Boynton and Johnson as follows:
1. The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles. 2. The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period. 3. Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated in the report. 4. The report shall contain either an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefore should be stated. In all cases where an auditor’s name is associated with financial statements, the report

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