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Accountancy
Emblem-money.svg
Key concepts
Accountant · Bookkeeping · Trial balance · General ledger · Debits and credits · Cost of goods sold · Double-entry system · Standard practices · Cash and accrual basis · GAAP / IFRS
Financial statements
Balance sheet · Income statement · Cash flow statement · Equity · Retained earnings
Auditing
Financial audit · GAAS · Internal audit · Sarbanes–Oxley Act · Big Four auditors
Fields of accounting
Cost · Financial · Forensic · Fund · Management · Tax

Generally Accepted Auditing Standards, or GAAS are sets of standards against which the quality of audits may be judged. Several organisations have developed such sets of principles, which vary by territory.

Contents

US GAAS

US GAAS are ten auditing standards, developed by the American Institute of Certified Public Accountants, consisting of general standards, standards of field work, and standards of reporting, along with interpretations. They were developed by the AICPA in 1947 and have undergone minor changes since then.

The US GAAS are as follows:

General Standards

  1. The auditor must have adequate technical training and proficiency to perform the audit
  2. The auditor must maintain independence in mental attitude in all matters related to the audit.
  3. The auditor must use due professional care during the performance of the audit and the preparation of the report.

Standards of Field Work

  1. The auditor must adequately plan the work and must properly supervise any assistants.
  2. The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.
  3. The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit.

The new standards are in effect for audits of financial statements for periods beginning on or after December 15, 2006.

Standards of Reporting

  1. The auditor must state in the auditor's report whether the financial statements are in accordance with generally accepted accounting principles (GAAP).
  2. The auditor must identify in the auditor's report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.
  3. When the auditor determines that informative disclosures are not reasonably adequate, the auditor must so state in the auditor's report.
  4. The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that such an opinion cannot be expressed in the auditors report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report. In all cases where the auditor's name is associated with the financial statements, the auditor should clearly indicate the character of the auditor's work, if any, and the degree of responsibility the auditor is taking, in the auditor's report.

ISAs

International Standards on Auditing are developed 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 juristictions, including the United Kingdom.

See also


Accountancy
Key concepts

Accountant

  1. REDIRECT template:· Bookkeeping
  2. REDIRECT template:· Cash and accrual basis
  3. REDIRECT template:· Constant Item Purchasing Power Accounting
  4. REDIRECT template:· Cost of goods sold
  5. REDIRECT template:· Debits and credits
  6. REDIRECT template:· Double-entry system
  7. REDIRECT template:· Fair value accounting
  8. REDIRECT template:· FIFO & LIFO
  9. REDIRECT template:· GAAP / International Financial Reporting Standards
  10. REDIRECT template:· General ledger
  11. REDIRECT template:· Historical cost
  12. REDIRECT template:· Matching principle
  13. REDIRECT template:· Revenue recognition
  14. REDIRECT template:· Trial balance
Fields of accounting

Cost

  1. REDIRECT template:· Financial
  2. REDIRECT template:· Forensic
  3. REDIRECT template:· Fund
  4. REDIRECT template:· Management
  5. REDIRECT template:· Tax
Financial statements

Balance sheet

  1. REDIRECT template:· Statement of cash flows
  2. REDIRECT template:· Statement of changes in equity
  3. REDIRECT template:· Statement of comprehensive income
  4. REDIRECT template:· Notes
  5. REDIRECT template:· MD&A
Auditing

Auditor's report

  1. REDIRECT template:· Financial audit
  2. REDIRECT template:· GAAS / ISA
  3. REDIRECT template:· Internal audit
  4. REDIRECT template:· Sarbanes–Oxley Act
Professional Accountants

CWA/CMA

  1. REDIRECT template:· ACCA
  2. REDIRECT template:· CA
  3. REDIRECT template:· CGA
  4. REDIRECT template:· CMA
  5. REDIRECT template:· CPA
  6. REDIRECT template:· PA

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.

Contents

US GAAS

US GAAS are ten auditing standards, developed by the American Institute of Certified Public Accountants, consisting of general standards, standards of field work, and standards of reporting, along with interpretations. They were developed by the AICPA in 1947 and have undergone minor changes since then.

The US GAAS are as follows[1]:

General Standards

  1. The auditor must have adequate technical training and proficiency to perform the audit.
  2. The auditor must maintain independence in mental attitude in all matters related to the audit.
  3. The auditor must use due professional care during the performance of the audit and the preparation of the report.

Standards of Field Work

  1. The auditor must adequately plan the work and must properly supervise any assistants.
  2. The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.
  3. The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit.

Standards of Reporting

  1. The auditor must state in the auditor's report whether the financial statements are presented in accordance with generally accepted accounting principles.
  2. The auditor must identify in the auditor's report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.
  3. When the auditor determines that informative disclosures are not reasonably adequate, the auditor must so state in the auditor's report.
  4. The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed, in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report. In all cases where an auditor's name is associated with financial statements, the auditor should clearly indicate the character of the auditor's work, if any, and the degree of responsibility the auditor is taking, in the auditor's report.

ISAs

International Standards on Auditing are developed 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 juristictions, including the United Kingdom.

See also

References

  1. ^ "AU Section 150: Generally Accepted Accounting Standards...". AICPA. December 15, 2001. http://www.aicpa.org/download/members/div/auditstd/au-00150.pdf. Retrieved April 11, 2010. [dead link]

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