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Math300

In: Business and Management

Submitted By bowbow
Words 2722
Pages 11
BUS 424
Auditing
Summary of Key Audit Planning Concepts
Dr. Miller

I. GAAP versus GAAS/SAS

Generally Accepted Accounting Principles (GAAP) – Consists of Statements of Financial Accounting Standards (SFAS) created by FASB to guide the preparation of financial statements.

Generally Accepted Auditing Standards (GAAS) – 10 general standards representing a framework from which AICPA can provide interpretations. They are organized into 3 groups – General Qualifications, Field Work Performance, and Reporting Results. They are broad guidelines.

General Qualifications: 1. Adequate training & proficiency – technically qualified and experienced with the industry 2. Independence in mental attitude – both in fact and in appearance 3. Due professional care – auditors are professionals responsible for fulfilling their duties diligently and carefully.

Field Work Performance: 1. Adequate planning & supervision – to ensure adequate audit and proper supervision of assistants. 2. Understanding the client’s internal control system – to determine the adequacy of client’s system to provide reliable data and safeguarding assets and records. 3. Sufficient competent evidence – how much and what types of evidence to accumulate for given set of circumstances. Requires professional judgment.

Reporting Results: 1. Determine whether statements are prepared in accordance with GAAP. 2. Identify circumstances when GAAP is not consistently followed. 3. Determine adequacy of disclosures to the statements. 4. Express the appropriate opinion.

Statements on Auditing Standards (SAS) – issued by the Auditing Standards Board of the AICPA, they interpret the 10 GAAS standards with detail and they are the most authoritative references to auditors....

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