Are you looking for auditing standards definition and what are the generally accepted auditing standards? You are on the right spot to know the answer of this question.
Auditing standards are quality of work that can be used to measure the performance of auditors. The audit staff can follow the stated principles and practice in the conduct of an audit. The business world is ever-changing.
In order to meet the business needs the professional accountants are busy in improving the rules of the business audit. The audit standards applied in the early period are not acceptable at present.
See Also: What is the Role of an Auditor in an Organization
The introduction of the computer in the account, separation of management from ownership, the establishment of big companies has increased the responsibility of the auditors.
The association of professional accountants has framed rules for the guidance of their members. The International Federation of Accountants issues international auditing guidelines.
The Chartered Accountants have also framed rules at national level. Anyhow, with the passage of time further improvements will be made to meet the new challenges of auditing work.
Auditing Standards Definition
John W. Cook says that the overall guidelines for auditing who are known as generally accepted auditing standards.
Walter B. Meigs says that auditing standards are authoritative rules for measuring the quality of performance.
According to A. H. Millichamp auditing standards prescribe the basic principles and practices which members are expected to follow in the conduct of an audit.
Hermanson says that auditing standards refer to measures of the quality of performance of the procedures used by the auditor during his or her examination.
See Also: How to Conduct an Audit of a Firm
Generally Accepted Auditing Standards
General Standards
TECHNICAL TRAINING: The auditor must have adequate technical training and proficiency. A firm of chartered accountants provides technical training in the field of auditing.
INDEPENDENCE: The auditor must be independent in fact and appearance. He is independent if he is not an employee and other persons do not influence him.
DUE CARE: The auditor must exercise due professional care in performing an examination. He must use his abilities in audit as a man of ordinary prudence performs his duties.
Field Work Standards
PROPER PLANNING: The audit work should be properly planned and any assistant properly supervised. He should prepare audit program to complete his work.
See Also: What is Audit Program
EVALUATION OF INTERNAL CONTROL: The study and evaluation of internal control should be made. The compliance and .substantive procedures help him to test the system of internal control.
OBTAINING EVIDENTIAL MATTER: The audit work requires evidence to check the performance of the business. The auditor should collect sufficient and reasonable evidence in order to discharge his duties.
Reporting Standards
PROPER FINANCIAL STATEMENTS: The reboot should state whether financial statements are presented ‘in conformity with generally accepted accounting principles.
APPLICATION OF ACCOUNTING PRINCIPLES: The report should state whether generally accepted accounting principles have been consistently applied in relation to the preceding period.
INDICATION OF INADEQUATE INFORMATION: The report should indicate any informative disclosures in the financial statements, which are inadequate.
EXPRESSING AN OPINION: The report should state a judgment on the financial statements or contain an assertion that an opinion cannot be expressed.
