This module covers the 10 generally accepted auditing standards (GAAS). Research the Code of Professional Conduct and then discuss how this module on ethics relates to GAAS.
How important is it to adhere to these standards? Is there any point in time in which you can loosely interpret or manipulate these standards? What is due professional care, and how does it refer to the GAAS?
Generally accepted auditing standards (GAAS) are guidelines which auditors must adhere to while conducting an audit of a company’s financial statements. The GAAS are a product of the Auditing Standards Board (ASB) and are the minimum standards of performance. When filing the audit report it must state that the GAAS were followed while completing the audit.
By using the GAAS the auditor can ensure the accuracy, consistency and verifiability of the auditor’s actions and report. The GAAS can minimize the probability of missing material information. GAAS consist of three main categories:
2.Standards of fieldwork
3.Standards of reporting
As in the title these are “generally accepted” so yes there can be some interpretation or manipulation to these standards. The auditor would need to exercise professional judgement on when to apply the standards or when to manipulate them. But if there is any type of manipulation the auditor would need to document what they did in the audit report.
Due professional care means the auditor needs to apply the care and skills expected of a reasonable prudent and competent independent auditor. Basically these skills and competency needs to be exercised in the planning and performance of the audit and the preparation of the report.