Updated November 11, 2020 What Are Generally Accepted Auditing Standards (GAAS)?Generally accepted auditing standards (GAAS) are a set of systematic guidelines used by auditors when conducting audits on companies' financial records. GAAS helps to ensure the accuracy, consistency, and verifiability of auditors' actions and reports. The Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants (AICPA) created GAAS. Understanding the Generally Accepted Auditing StandardsGAAS are the auditing standards that help measure the quality of audits. Auditors review and report on the financial records of companies according to the generally accepted auditing standards. Auditors are tasked with determining whether the financial statements of public companies follow generally accepted accounting principles (GAAP). GAAP is a set of accounting standards that companies must follow when reporting their financial statements. Auditors review a company's financial numbers and accounting practices to ensure they're consistent and comply with GAAP. The Securities and Exchange Commission (SEC) requires that the financial statements of public companies are examined by external, independent auditors. While GAAP outlines the accounting standards that companies must follow, GAAS provides the auditing standards that auditors must follow. Key Takeaways
Click Play to Learn What Generally Accepted Auditing Standards AreRequirements for GAASGenerally accepted auditing standards (GAAS) comprises a list of 10 standards, divided into the following three sections: General Standards
Standards of Field Work
Standards of Reporting
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What is the objective of tests of controls when performed for internal control audits?The objective of the tests of controls in an audit of internal control over financial reporting is to obtain evidence about the effectiveness of controls to support the auditor's opinion on the company's internal control over financial reporting.
What are the test of controls in an audit?A test of control describes any auditing procedure used to evaluate a company's internal controls. The aim of tests of control in auditing is to determine whether these internal controls are sufficient to detect or prevent risks of material misstatements.
What are the auditing standard requirements for obtaining an understanding of internal controls?The auditor should obtain a sufficient understanding of each component8/ of internal control over financial reporting ("understanding of internal control") to (a) identify the types of potential misstatements, (b) assess the factors that affect the risks of material misstatement, and (c) design further audit procedures ...
Which industry standard conducts audits of the company's internal controls over financial reporting?. 04 The standards, AS 1005, Independence, AS 1010, Training and Proficiency of the Independent Auditor, and AS 1015, Due Professional Care in the Performance of Work, are applicable to an audit of internal control over financial reporting.
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