What is the importance of GAAS to audit?
Generally Accepted Auditing Standards, or GAAS are sets of standards against which the quality of audits are performed and may be judged. Several organizations have developed such sets of principles, which vary by territory. In the United States, the standards are promulgated by the Auditing Standards Board, a division of the American Institute of Certified Public Accountants (AICPA). Show
AU[1] Section 150 states that there are ten standards:[2] three general standards, three fieldwork standards, and four reporting standards. These standards are issued and clarified Statements of Accounting Standards, with the first issued in 1972 to replace previous guidance. Typically, the first number of the AU section refers to which standard applies. However, in 2012 the Clarity Project significantly revised the standards and replaced AU Section 150 with AU Section 200, which does not explicitly discuss the 10 standards.[3][4] In the United States, the Public Company Accounting Oversight Board develops standards (Auditing Standards or AS) for publicly traded companies since the 2002 passage of the Sarbanes–Oxley Act; however, it adopted many of the GAAS initially. The GAAS continues to apply to non-public companies. General[edit]
Standards of Field Work[edit]
Standards of Reporting[edit]
Clarity Project[edit]In 2004, a project was begun to clarify and converge the standards with the International Standards in Auditing (ISAs). Many of the AU sections are being remapped as part of the Clarity Project.[5] In October 2011, SAS 122 was issued which superseded all previous SASes except 51, 59, 65, 87, and 117-20.[6] In the interim period, these new AU sections are referred to as AU-C until 2014.[6] The AICPA provides a list of the AU-C standards.[7] ISAs[edit]International Standards on Auditing are stated by the International Auditing and Assurance Standards Board of the International Federation of Accountants. Derivatives of ISAs are used in the audit of several other jurisdictions, including the United Kingdom. See also[edit]
References[edit]
What is the importance of auditing?An audit is important as it provides credibility to a set of financial statements and gives the shareholders confidence that the accounts are true and fair. It can also help to improve a company's internal controls and systems.
What is the purpose of performing analytical review procedures in an audit performed under GAAS?The objective of analytical procedures used in the overall review stage of the audit is to assist the auditor in assessing the conclusions reached and in the evaluation of the overall financial statement presentation.
What does GAAS apply to?Generally Accepted Auditing Standards (GAAS) are a set of principles and requirements that provide the basis for how an auditor prepares for, performs, and reports the results of audits.
What is the relationship between GAAS and Statements on Auditing Standards?In the United States, Statements on Auditing Standards provide guidance to external auditors on generally accepted auditing standards (abbreviated as GAAS) in regards to auditing a non-public company and issuing a report.
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