GAAS, GAGAS and PCAOB Auditing Standards

Audit standards be set codes of conduct for studyors when take stocking financial statements or early(a) financial issues of a company. There is excessively a relation to surgery audit and certain attestation engagements.The American Institute of Certified national Accountants (AICPA) established only Gener all(prenominal)y Accepted Auditing Standards (GAAS). GAAS, in turn, formed the earth for opposite standards like the usually Accepted political relation Auditing Standards (GAGAS) and the Public companionship Accounting Oversight Board (PCAOB). This paper seeks to define those three standards, tour clarifying the similarities and differences between them. only the three standards have some underlying similarities. They all address the rudimentary audit issues like transp arncy, accuracy, reliability etc of financial statements.They all also spell out standards for audit field work and performances, concurrently spelling out, on a dynamic base, the education and qua lifications required of the audit and audit assistants. All the three standards ultimately target the protection of the libertine and its assets or finances. They minimize operational risks. And though driven by varied objects, GAGAS and PCAOB are based on the AICPAs GAAS.The different objectives of the three auditing standards results in a difference in their content, approach, criteria and specifications. Nowadays, the GAAS primarily deals with audits of non-issuer public companies. PCAOB, on the other hand, addresses the concerns of auditors auditing issuer and certified public companies.Its hold in matters of issuer companies, as controlled by the American Securities and Exchange outfit (SEC) is paramount. GAGAS, as set by the Government duty bureau, applies to government nerves or presidencys availing government assistance, setting auditing standards for their functions, activities, programs and so on.1IntroductionThe external audits of political and non-governmental en tities may be broadly classified into Financial Audits, Performance Audits and affirmation Engagements. Auditing Standards have some General Standards, as well as champaign Work Standards and Reporting (GAO, July 2007).The Generally Accepted Audit Standards (GAAS) are issued as Statements on Audit Standards (SAS)2. This is done by the Audit Standards Board or ASB which has been set up by the AICPA. These standards relate principally to the audit processes and procedures which are to be adopted by the public companies not issuing shares. 3The General Accepted Auditing Standards are sets of systematic guidelines employd when conducting audits on company finances, to run across accuracy, consistency and verifiability of auditors action and reports.However, for auditing government bodies, the US Government Accounting Office sets separate rules and standards, outlined by the GAGAS. These include auditing of their activities and programs, as well as all their functions.The objective i s to ensure correct use of funded assistance availed from government bodies or agencies. (GAO, Jul 2008). Companies that issue shares and that are registered with the Securities and Exchange Commission were placed under the standards of the PCAOB4.As per the provisions of GAGAS, their reference incorporates GAAS, unless the Government Accounting Office specifically excludes them through a formal announcement. Sometimes, depending on the audit requirements and the memorial tablet being audited, GAGAS may be used together with PCAOB.Basic Objectives and Premises fag all Audit StandardsThe similarities amongst all the auditing standards may be drawn from their basic premises and government policies driving them. For example, all auditing standards serve as a regulatory tool, prescribing the process to be followed by auditors, and determining what is to be scrutinized in the financial statements, internal control processes and management performances.Audits done on an organizations f inancial statements express an trust on the fairness with which the statements agree the status and changes in the financial position, operational results and cash flows.Universally, audits need to be performed by a person or persons who has/have adequate practiced training and proficiency as an auditor. The auditors need to maintain their independence so that their assessment and credits reflect an impartial and objective view of the issues involved. They are also expected to exercise due professional care in planning and conducting the audit report 5.The auditor must(prenominal)iness have sufficient companionship of internal control processes so as to enable him to plan decent and arrive at the nature, extent and timing of tests to be performed for ensuring a proper audit. While in the field, the work ineluctably to be adequately mean and properly supervised.The competency and sufficiency of evidence reviewed needs to be certified so that the auditor and others can for m a proper opinion on the financial matters in the organization, which is subjected to the audit.All performance audits have similar standards. The auditors must prepare written audit reports communicating the audit results6. The audit reports should be prepared and made available so as to ensure timely use by management legislative and other interested parties.The auditors must report the scope, objectives and methodology of audits. They must report any significant findings of audits and in the applicable cases, also the auditors conclusions.They should report recommendations for action. This is to correct caper areas and ensure operational improvement. They must state what auditing standard was used in the reporting. All cases of significant non compliance or abuse must be reported, found during or related to the audit. In some cases, this reporting has to be done to outside parties.Appropriate inspection and observation must be conducted to join forces competent and factual ev idence so that a average opinion on the financial state of affairs of the organization under audit may be formed.Audit work must be properly plotted & materiality considered for arriving at considered opinions based on competent evidence by selecting appropriate nature, timing & extent of tests. Audits must be designed so that material frauds may be recovered reasonably well.7 It is notable that frauds are intentional misstatements.Material misstatements may result from direct & material illegal acts and this is to be considered in audit design so as to ensure the reasonable detection of such misstatements through the audit process.8 The auditor must detect any indirect illegal acts that may indirectly affect appropriateness of financial statements by applying audit procedures9 (GAO, Jul 2007).Every audit strives to maintain accountability and transparentness in spite of appearance any organizational policy, whether for governmental or non-governmental organizations. To this en d, public resources within an organization must be efficiently, ethically, effectively, equitably and economically utilized.Where this is not the case, audits prescribe the remedial steps to be taken in a time-bound modality by the organizations management and other concerned parties. All assessments by the auditors must be objective, concise, independent and factual, as related to an organizations financial or management performance. The auditor therefore needs to be independent and impartial. All this adds up to a case for realize professionalism and quality of audit processes.