Generally Accepted Auditing Standards

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Date Submitted: 09/17/2011 06:40 PM

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Generally Accepted Auditing Standards

The auditing profession is a complicated and extremely important profession. This is even more evident in recent years with the financial scandals at various large companies. In order to ensure that audits are done in a systematic and professional manner, the AICPA has set auditing standards. There are ten standards in the generally accepted auditing standards. These standards consist of general standards, standards of field work, and standards of reporting. All three primary types of audits, financial, operational, and compliance, are affected by these standards. In more recent years, the Sarbanes-Oxley Act of 2002 and Public Companies Accounting Oversight Board have added further requirements.

The Ten Standards

In the late 1940s, the AICPA approved auditing standards that became known as the ten generally accepted auditing standards (GAAS). They were later included in the Statements on Auditing Standards. These standards describe the quality of performance and overall objectives of financial statement auditing. The ten standards are grouped into three categories: general standards, standards of field work, and standards of reporting (Boynton & Johnson, 2006).

There are three standards included in the general standards group. This group describes the qualifications of the auditor and the quality of the auditor’s work. The first standard states that an audit is to be performed by a person who has adequate technical training and proficiency as an auditor. This includes formal university education, practical training and experience, and continuing professional education. Independence in mental attitude is the second standard. It states that independence in mental attitude is to be maintained by the auditor. He or she cannot be influenced by management in any way during the audit or when reporting the findings. The last standard of this group deals with due professional care. An auditor is expected to be...