The evidence that auditors obtain relates to assertions made by management. Auditors are required to obtain sufficient appropriate evidence during the course of their audit before drawing any conclusions regarding the accuracy of the reported information. The gathering and evaluation of this evidence is what allows auditors to form an opinion regarding the reliability of the company’s financial statements.
Note that the definition of auditing indicates that auditors obtain and evaluate evidence. Standard setters and lawmakers have created very detailed rules regarding the expectation for independence and objectivity of auditors as they carry out their audits. If you discovered that the mechanic you asked to verify the seller’s information was the seller’s brother, you would probably be less assured by the mechanic’s opinion, regardless of how knowledgeable he was. Consider the used car purchase discussed above. In order for the public to trust the auditor’s opinion regarding the fairness of the reported information, the auditor should not be biased in one direction or the other. Objectively Obtaining and EvaluatingĪuditors must be objective as they obtain and evaluate audit evidence. Auditors follow this detailed plan, which is called an audit program, as they carry out the audit procedures to obtain and evaluate evidence. Significant work is put into planning well in advance of performing any audit procedures. Auditing standards require that auditors go to great lengths to plan and prepare for the audit. Systematic ProcessĪuditing is a systematic process.
This definition contains several key elements.
#GENERALLY ACCEPTED AUDITING STANDARDS AND PROCEDURES PROFESSIONAL#
The auditor must have due professional care in the planning and preparation of the report.The auditor should be independent in mental attitude in relating to the assignment.The audit is to be performed by a person or persons having educated technical training and proficiency as an auditor.The principles have been divided into three parts. Several organizations have developed such sets of principles, which vary by territory. GAAS means Generally Accepted Auditing standards are sets of standards against which the quality of audits are performed and may be judged. Principles of Generally Accepted Auditing Standards (GAAS)