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Generally Accepted Auditing Standards Essay

852 words - 4 pages

Generally Accepted Auditing Standards
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 ...view middle of the document...

The reporting standards cover what the auditor must do prior to reporting the data gathered. The reporting standards require the auditor to state if the financial statements are prepared using the Generally Accepted Accounting Principles (GAAP) and if the standards are applied consistently throughout the financial accounting of the business. The auditor must also make sure any disclosures are included in the financial statements and that disclosures are noted properly. Also the auditor is required to include his or her opinion regarding the financial statements and the financial position of the company.
General Accepted Accounting Standards affect each financial, operational, and compliance audits. For financial statements Generally Accepted Accounting Standards place limitations on the type of individual a company hires to perform the financial statement audit. “To ensure independence in mental attitude, as noted under GAAS general standards, most states have enacted laws so that only certified public accountants (CPAs) can perform financial statement audits. To further enforce this GAAS element, many corporations hire an external audit firm” (Kinyo, 2011. p. 1). The standards of fieldwork included in the Generally Accepted Accounting Standards affect operational audits by regulating how the auditor performs his or her work. “A high degree of importance is placed on the auditor’s efficiency and effectiveness reports and the auditor’s recommendations for improvement by the entity” (Kinyo, 2011. p. 1). The standards of reporting section of the Governmental Accepted Accounting Standards affects compliance audits by requiring compliance to the Sarbanes-Oxley Act of 2002. “The Sarbanes-Oxley Act of 2002 requires companies to have a dual-purpose audit that audits both the financial statements and management’s assertion as to whether it has complied with criteria regarding an...

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