GAAS, GAGAS and PCAOB Auditing Standards

Audit types are dress circle codes of guide on for scrutiniseors when size uping pecuniary statements or other fiscal issues of a company. There is too a relation to performance size up and certain attestation engagements.The American Institute of apprised Public Accountants (AICPA) established every chiefly original Auditing Standards (GAAS). GAAS, in turn, formed the innovation for other standards like the loosely Accepted Government Auditing Standards (GAGAS) and the Public Company accounting system Oversight Board (PCAOB). This paper seeks to draw those three standards, while clarifying the similarities and differences amidst them. any the three standards sustain few central similarities. They each in all address the elementary canvas issues like transparentness, accuracy, reliability etc of financial statements.They all also spell out standards for audit field swear out and performances, simultaneously spell out, on a dynamic base, the bringing up and qualifications required of the audit and audit assistants. whole the three standards ultimately target the security department of the firm and its assets or finances. They minimize operational risks. And though driven by contrasting objects, GAGAS and PCAOB are based on the AICPAs GAAS.The different objectives of the three auditing standards numbers in a difference in their content, approach, criteria and specifications. Nowadays, the GAAS primarily deals with audits of non-issuer reality companies. PCAOB, on the other hand, addresses the concerns of listeners auditing issuer and certified popular companies.Its hold in matters of issuer companies, as learnled by the American Securities and Exchange fit (SEC) is paramount. GAGAS, as set by the Government answerability Office, applies to government organisations or organizations availing government assistance, move auditing standards for their functions, activities, programs and so on.1IntroductionThe external audits of go vernmental and non-governmental entities whitethorn be broadly classified into pecuniary Audits, Performance Audits and Attestation Engagements. Auditing Standards use up some General Standards, as well as Field 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 select by the public companies not issue shares. 3The General Accepted Auditing Standards are sets of authoritative guidelines used when conducting audits on company finances, to curb accuracy, consistency and verifiability of listeners do and reports.However, for auditing government bodies, the US Government account statement Office sets separate rules and standards, outlined by the GAGAS. These include auditing of their activities and programs, as w ell as all their functions.The objective is to attend decent(a) 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 downstairs the standards of the PCAOB4.As per the provisions of GAGAS, their extension incorporates GAAS, unless the Government Accounting Office specifically excludes them through a formal announcement. Sometimes, depending on the audit requirements and the organization being audited, GAGAS may be used together with PCAOB.Basic Objectives and exposit behind 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 restrictive tool, prescribing the process to be followed by attendants, and find out what is to be scrutinized in the financial statements, inhering control processes and mana gement performances.Audits done on an organizations financial statements usher an opinion on the fairness with which the statements fight down 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 technical training and advancement as an auditor. The auditors need to maintain their freedom so that their assessment and opinions reflect an just and objective view of the issues involved. They are also expected to exercise due paid care in throwning and conducting the audit report 5.The auditor essential(prenominal)iness have sufficient knowledge of internal control processes so as to enable him to plan aright and arrive at the nature, period and timing of tests to be performed for ensuring a ripe audit. While in the field, the work needfully to be adequately plotted and properly supervised.The competency and sufficiency of evidence reviewed postulate to be assured so that the auditor and others can form 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 communication the audit results6. The audit reports should be fain and made available so as to ensure timely use by management legislative and other interest parties.The auditors must report the scope, objectives and methodology of audits. They must report any strong findings of audits and in the applicable chances, also the auditors conclusions.They should report recommendations for action. This is to correct problem 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 link up to the audit. In some cases, this reporting has to be done to outside parties.Appropriate inspection and bill must be conducted to gather workmanlike and factual evidence so that a reasonable opinion on the financial state of affairs of the organization under audit may be formed.Audit work must be properly planned & materiality considered for arriving at considered opinions based on competent evidence by selecting detach nature, timing & extent of tests. Audits must be designed so that material frauds may be detected reasonably well.7 It is luminary 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 detecting of such misstatements through the audit process.8 The auditor must detect any indirect illegal acts that may indirectly come to correctness of financial statements by applying audit procedures9 (GAO, Jul 2007).Every audit strives to maintain accountability and transparency within any organizational policy, whether for governmental or non-governmental organizations. To this end, public resources within an organization must be efficiently, ethically, effectively, equitably and economically utilized.Where this is not the case, audits prescribe the remedial stairs to be taken in a time-bound manner by the organizations management and other concerned parties. All assessments by the auditors must be objective, concise, autarkical and factual, as related to an organizations financial or management performance. The auditor therefore needs to be self-sustaining and impartial. All this adds up to a case for complete professionalism and quality of audit processes.