Running head GENERALLY ACCEPTED AUDITING STANDARDS 1 Generally Accepted Auditing Standards ACC 491 GENERALLY ACCEPTED AUDITING STANDARDS 2 Generally Accepted Auditing Standards There are requirement in auditing since the law was created in 2002 and there were several changes to ensure that the auditing is prepare in a professional and accurate way The Generally Accepted Auditing Standards GAAS has 10 elements that are in three sets which are general field work and reporting The Generally Accepted Auditing Standards GAAS enhance the way financial report operational audits and compliance audits Auditing Standards The American Institute of Certified Public Accountants AICPA has a set of 10 standards for auditors in the way the auditor must perform their work duties The general standards contain three difference standards that auditors must have professional training in the way conduct their duties The general standards contain three standards These standards state that auditors must have technical training maintain an independence from the company for the audit must exercise professional care in performance and reporting Generally Accepted Auditing Standards n d p 1 When the field work must be planned and supervised if needed The auditor must understand the organization environment in detail which includes the internal controls When dealing with both requirements which will aid in fully understanding the risk of management The next standard is in the category of obtaining the evidence that classified an appropriate when reaching an opinion on the financial statements Then the standards of reporting which requires that has to state whether the financial reports are in compliance with the Generally Accepted Accounting Principles GAAP of the changes in the financial reports are different in the reports that where reported for the last previous periods and are disclosures are informative enough and the type of opinion the auditor gave the company and why Each area the auditor when over will be in the report GENERALLY ACCEPTED AUDITING STANDARDS 3 Types of Audits The financing audit is the auditing of a company s financial statements An auditor will determine in the statement that follows the GAAP and will prepares reports in stating the auditors opinions with the statements When the auditor is deciding what opinion they will be submitting they would use evidence from the operations and the cash flow of the company Financial Operational When an operational audit is done it is called a performance audit The audit is a form of an evaluation of the evidence about the organization s operation When doing an operational audit the auditing standards of the field work will be taken into consideration and is used This is when the auditors shows all the risks when the operational audits was performed Once the audit is over each auditor states their opinion and reports to the board of directors Compliance The compliance audit reports all the reporting standards The auditor will use the evidence to evaluate the financial and operating activities of the organization These activities must in within the law rules and regulations set for the organization If there are any changes that are out the ordinary which cause an unreasonable reports that are given to the board of directors The audit will be noted and the opinions will be given at the end of the audit GAAS Sarbanes Oxley Act Auditing Changes GENERALLY ACCEPTED AUDITING STANDARDS 4 The Sarbanes Oxley Act SOX is a new law created by Congress in 2002 This act restricts the use of personal and professional relationship between auditors and organizations The auditors cannot work with the accounting systems or aid in anyway of the bookkeeping of the organization when they are hired to do auditing All opinions are reported in details goes to the board of directors all risk are detailed with any changes that are required to receive full assurance If the auditor cannot follow the rules that are set forth to do then they must remove themselves from the organization and report the issues to the Security and Exchange Commission SEC Public Companies Accounting Oversight Board The Public Companies Accounting Oversight Board PCAOB was created by SOX PCAOB sets up auditing standards for auditors and standards for auditing public traded companies Boynton Johnson 2006 Both SOX and PCAOB affects how public traded companies work with auditors and the new standards that each organization must use and follow Before the SOX was created the PCAOB auditors controlled themselves and reported to the company interest only and did not report to the public interest Additional Requirements The PCAOB starting in 2010 by requiring that all auditors must submit an annual reports that states the organization that they audited and had fines and fees due to disciplinary actions The reports have to be filed within 30 days when any changes were made or changed within the auditing firm PCAOB has 6 auditors standard then the SOX has which involves consistency with the financial statement and any changes in the accounting and if the changes where in compliances with the Generally Accepted Accounting Principles GAAP Any GENERALLY ACCEPTED AUDITING STANDARDS 5 misstatementdisclosures require reporting On consulting an auditor evaluates several periods of financial reports for comparability Auditing Standards No 6 2008 p 1 Conclusion The generally accepted auditing standards involve several organizations and each of the standards must be met and the auditors has to follow the laws rules and regulations that the Generally Accepted Auditing Standards GAAS states that requires the auditors to follow since it was created in 2002 by Congress The auditing system was changed to protect and aid the public in making each goal that shows the fairness and accuracy of the financial statements of an organization Any auditors must keep themselves from the organization they audit which reduce the risk of fault audits reports References GENERALLY ACCEPTED AUDITING STANDARDS 6 Auditing Standards No 6 2008 Retrieved April 8 2012 from http pcaobus org Standards Auditing Pages Auditing Standard 6 aspx Generally Accepted Accounting Standards n d Retrieved April 8 2012 from Boynton and R Johnson 2006 Modern Auditing Assurance Services and the Integrity of Financial Reporting 8th ed Hoboken NJ Retrieved from University of Phoenix e www aicpa org campus