ACC 491 Generally Accepted Auditing Standards

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ACC 491 Generally Accepted Auditing

Standards

University of Phoenix

Contemporary Auditing 1

ACC 491

Generally Accepted Auditing Standards

Auditing is managed by a set of characteristics referred to as Generally Accepted

Auditing Standards or GAS, and these principles are linked to the American Institute of

Certified Public Accounts. There are ten standards that make up GAAS, of which can be

combined to obtain the following categories, standards, standards of field work, and the

standards of reporting (AICPA). The general standards consist of three standards

including the auditor’s proficiency in performing the audit, the independence of the

auditor in relation to other scenarios, and the auditor’s ability to exercise professional

care. The following three standards of field work are the auditor’s ability to supervise

and provide assistance, the understanding of the company’s environment, internal

controls, and the risk of material misstatement of financial statements. Finally, the

auditor must make their effort in collecting sufficient audit evidence. Finally, the auditor

must make their effort in collecting sufficient audit evidence. Finally, the remaining four

principles of reporting standards include the financial statements in relation to Generally

Accepted Accounting Principles (GAAP), the auditor’s report must clarify circumstances

where principles are constantly observed in the present period in comparison to the

following period. An auditor’s report must coincide with the auditors belief that

disclosures are adequate and that the auditor must give an opinion on the financial

statements. In the scenario that an opinion cannot be established, there must be an

explanation for the lack of opinions. Collectively, the standards of the auditors must

ensure that the audit was successful and all the actions of the auditor were completed

accurately.

The aforementioned standards is related to financial, operational, and compliance

audits. Financial audits are audits that are completed in order justify the financial

statements or transactions of the company, though individuals are able to have their

finances audited as well. The initial process includes the auditor analyzing income

statements, balance sheets, and linked financial statements. In general, the auditor must

have previous knowledge of GAAP, but also be able to complete the audit with the

general standards of GAAP, but still complete the audit under the standards of GAAS. In

addition, the financial audit requires accuracy and persistency with the statements; the

auditor must then adhere to the last section of GAAS and relates to the standards of

reporting. An operational audit is an audit which evaluates the operations of a company

on a daily basis and makes the attempt to improve them. In such an audit, there are

general standards as well as standards of field work. Finally, compliance audits are

audits in which the employees of the company are evaluated to determine whether or

not they are following the standards of the organization. These types of audits can be

repetitive and extensive, thus the reason why auditors must be very careful that each

audit complies with the same indulgence. Furthermore, regardless of the type of audit,

auditors are responsible for conducting their audits by accepting the typical accounting

standards. There are some audits which do not apply to the respective audits.

Sarbanes-Oxley act of 2002 altered how accounting professionals operated for the rest

of our history; prior to this, accountants were constantly threatened by the credibility of

accounting. Auditing is a type of accounting which will forever be influenced by the

implementation of Sarbanes-Oxley. The specific act discusses the characteristics of a

publicly traded company and the audits of these companies. Furthermore, public

accounting firms can no longer provide auditing or other accounting services for the

same client. Conflict of interest can also become a critical issue and thus the reason why

it’s detailed in the Sarbanes-Oxley. Conflict of interest is a serious issue which was

addressed by Sarbanes-Oxley; apart from avoiding particular auditing services,

companies are required to switch from one firm to the next every five years. Finally, the

Sarbanes-Oxley is an act which was created for the implementation of the Public

Accounting Oversight Board and was introduced under the spirit of the Sarbanes-Oxley

act and continues to maintain the standards as well as the best interest of the investor.

In general, the accounting profession is a practice which originates from the practices of

old sectors in which auditing are the most recognizable. Auditing in general is usually

portrayed as a harsh profession, but the reality is that auditing is critical to the success of

the business. Auditing helps a company in operating the business properly and the

investors obtain accurate information; accurate information is critical to the process of

following accounting standards in order to obtain the damages of misleading or

fraudulent financials.

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ACC 491 Generally Accepted Auditing Standards University of Phoenix Contemporary Auditing 1 ACC 491 Generally Accepted Auditing Standards Auditing is managed by a set of characteristics referred to as Generally Accepted Auditing Standards or GAS, and these principles are linked to the American Institute of Certified Public Accounts. There are ten standards that make up GAAS, of which can be combined to obtain the following categories, standards, standards of field work, and the standards of reporting (AICPA). The general standards consist of three standards including the auditor’s proficiency in performing the audit, the independence of the auditor in relation to other scenarios, and the auditor’s ability to exercise professional care. The following three standards of field work are the auditor’s ability to supervise and provide assistance, the understanding of the ...
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