![]() This means that the auditor will determine whether the company has followed the financial reporting standards.Īn operational audit is designed to examine the organizations activities to assess the performance of the business and to develop various recommendations to improve the use of the business resources. A financial audit is an audit designed to examine the financial statements, records and related operations to determine if the business is adhering to the GAAP. This will ensure that the auditor is providing the most up to date information that the audit requires. The auditor should also be consistent in how they perform the audit so that the results do not vary from audit to audit due to inconsistencies of the actual performance of the audit.Since the auditing profession is held to such a high standard, the auditor should also keep up to date on all technical or legal training. Consistency is also important when conducting an audit because the results must be able to be understood by the target audience. The GAAP is set up to create standard rules that all publicly held companies are responsible to follow and the auditor must also ensure the business if following these rules. This could lead to the creation of wrong opinions that can hurt the business, the auditor or the investors that rely on the information that is provided.Īuditors are also responsible to abide by the GAAP. It is against most policies and unethical to provide an opinion if the auditor does not have all the facts. ![]() Before an auditor writes up the report for either the financial, operational or compliance audit, they must gather sufficient evidence to base their opinion. Auditors need to be able to recognize this and to report accurately on it. If he company has poor internal controls, it leaves more room for unethical behavior. The auditor must also be very aware of the internal controls of the business. It is also important that the auditor takes professional care in performing the audit so that information is not overlooked or the wrong assumptions are made. ![]() Many people rely on the information that auditors provide and the information the auditor provides must not sway from the facts. The elements of the GAAS are very important when pertaining to financial, operational and compliance audits.In financial, operational and compliance audits, it is important to have independence in fact and appearance because the auditor will be held responsible for the information that they provide. Therefore to be an auditor is a difficult and stressful career that many people will not be able to do. The auditor is required to make very difficult decisions and to abide by all the standards for their profession. Some of the elements of the GAAS include independence in fact and appearance, professional care in performing the audit, internal control evaluation, evidence sufficient to base an opinion, according to GAAP, consistency and the technical training and proficiency of the auditor.Īll of these elements play equally important roles in the GAAS and all elements should be qualities of an auditor. There are several elements of the general accepted auditing standards or GAAS. We Will Write a Custom Essay about Generally Accepted Auditing Principles EssayĮssentially the review is done to enable an accountant to assess the representations of management and to consider whether the financial statements conform to the generally accepted accounting principles, or GAAP.
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