Auditing Standards are playing vital roles in providing guidelines to aid professional auditors to fulfill fulfilling their duties and responsibilities in auditing the historical financial information. The auditing professionals are required to be competent, independent and they…
the accumulation and evaluation of evidence regarding information to help determine and report on the degree of correspondence between information and established criteria (p. 4).
Auditing requires that there must be verifiable information and certain standards by which the auditor can evaluate the information. The standards can vary depending on the nature of information. For instance, GAAP (Generally Accepted Accounting Principle) is considered to be the criteria for auditing historical financial statements. Auditing requires evidence like written communication and oral testimony and auditors need to obtain sufficient quality of evidences. The final step in auditing is preparing the audit report (Arens, Elder and Beasley, 2006, p. 4).
GAAS are auditing standards that suggest necessary qualifications and characteristics of auditors. The guidelines are 10 GAAP standards that have experienced minimal changes since these were first developed in 1947 (Arens, Elder and Beasley, 2006, p. 4).
These GAAS standards remain the same through time and for all audits, even though auditing procedures may vary depending on the complexity of accounting systems. The 10 GAAS standards relate to the competence of auditor, his independence in both financial and managerial relations and the attitudes about professionalism (Louwers, Ramsay and Sinason, 2008. p. 39- 42).
The GAAS elements also affect the standards at field that include detailed planning of the audit, risk assessment through internal control and collecting audit evidences. One of the major concerns of GAAS is regarding the standards in financial reporting and its contents.
The Sarbanes-Oxley Act, passed by George W Bush on July 2002, was intended to establish investor confidence by improving the quality of financial disclosures and audit reporting, to strengthen the independence of accounting firms and to increase the responsibilities of corporate officers (Hayes, Dassen and Schilder, 2005, p. 49).
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