The Auditing Profession

INTRODUCTION

Auditing is an important facet of the accounting field that provides assurance that an organization’s financial statements are in accordance with generally accepted accounting principles (GAAP). Auditing also provides services for organizations including: internal controls, operations and auditing of tax returns. Various types of audits exist, as well as types of auditors. Professional organizations such as the AICPA and State CPA groups provide leadership and standards that must be followed by auditors and accountants in general. Ethical standards are central to the auditing profession and help maintain the reliability of the profession. The outcome of an audit includes the auditing report, which must be carefully constructed with accurate and reliable information. Finally, the trends of the auditing profession constantly evolve to sharpen focus of risk management.

AUDITING DESCRIPTION

The purpose of an audit is to determine the reliability and the validity of information for an organization’s financial statements, tax returns, internal controls, and operations within the manufacturing segment of the organization (Arens, Beasley, & Elder, 2010, p. 4). In order to complete an audit, information must be verifiable and standards must be set for the auditing process (Arens, Beasley, & Elder, 2010, p. 4). It is important to note that auditing relies on independence to ensure credibility and reliability of the reports generated by the auditing process.

The purpose of the audit designates the criteria used within the auditing process (Arens, Beasley, & Elder, 2010, p. 4). For an audit of financial statements, GAAP or International Financial Reporting Standards (IFRS) are used to allocate the criteria (Arens, Beasley, & Elder, 2010, p. 4). If the audit is for tax returns of the Internal Revenue Service (IRS), then the criteria are set by the Internal Revenue Code (Arens, Beasley, & Elder, 2010, p. 4). For auditing other information that is more...