Generally Accepted Auditing Standards: Three Main Concentrations of Audit
Generally Accepted Auditing Standards
ACC/491
June 1, 2015
Venetia Clark
Nature and Function of Audit
The nature and function of audit is multifaceted with a comprehensive broad objective; to provide users with complete, relevant and reliable information that assist them in making business decisions. More commonly the users of this information are focused on accurate financial statements and an evaluation of managements assertions regarding the oversight of reporting, internal controls and presentation of that information in accordance with generally accepted accounting principals (GAAP) as well as mandated legislation where applicable.
There are three main concentrations of audit: financial, operational and compliance and a set of generally accepted audit standards (GAAS) that addresses how these standards apply. These standards are critical to the assurance provided by the auditing profession as the information is valuable to the entity itself, its investors and, if publically traded, in complying with the Sarbanes-Oxley Act of 2002 (SOX) and its subsequent review boards (Boynton & Johnson, 2006). Operational and compliance, or internal controls audits, while different in information, share similar benefits from this framework as compliance is a part of the dual-purpose audit under SOX legislation.
Generally Accepted Audit Standards
The American Institute of Certified Public Accountants (AICPA) set out 10 auditing standards, grouped into three categories, to identify a framework for conducting audits in three categories that, together, establish the quality of performance and the overall objectives to be achieved in a financial statement audit. These categories are general standards, standards of fieldwork and standards of reporting.
The general standards relate to the qualifications of the auditor and the quality of the auditors work. According to the general standards the audit is to be performed by a person with
ACC/491
June 1, 2015
Venetia Clark
Nature and Function of Audit
The nature and function of audit is multifaceted with a comprehensive broad objective; to provide users with complete, relevant and reliable information that assist them in making business decisions. More commonly the users of this information are focused on accurate financial statements and an evaluation of managements assertions regarding the oversight of reporting, internal controls and presentation of that information in accordance with generally accepted accounting principals (GAAP) as well as mandated legislation where applicable.
There are three main concentrations of audit: financial, operational and compliance and a set of generally accepted audit standards (GAAS) that addresses how these standards apply. These standards are critical to the assurance provided by the auditing profession as the information is valuable to the entity itself, its investors and, if publically traded, in complying with the Sarbanes-Oxley Act of 2002 (SOX) and its subsequent review boards (Boynton & Johnson, 2006). Operational and compliance, or internal controls audits, while different in information, share similar benefits from this framework as compliance is a part of the dual-purpose audit under SOX legislation.
Generally Accepted Audit Standards
The American Institute of Certified Public Accountants (AICPA) set out 10 auditing standards, grouped into three categories, to identify a framework for conducting audits in three categories that, together, establish the quality of performance and the overall objectives to be achieved in a financial statement audit. These categories are general standards, standards of fieldwork and standards of reporting.
The general standards relate to the qualifications of the auditor and the quality of the auditors work. According to the general standards the audit is to be performed by a person with