Question

1.List the individual components of Generally Accepted Auditing Standarts, by group in order, briefly describing each, and indetify the widely used acronym to indetify each individually and all as a group.

2. List and briefly describe the four different types of auditors opinion reports that an auditor can render and include the simple practice aid tool, phrase, symbol or icon that is generally uses to quick reference indentify each.

3. List and briefly describe, measures yhat a cpa firm shoul implement and practice to minimize the threat of litigation against them

Answer 1

Generally accepted auditing standards are the standards used by the auditors as the guidelines during the course of their audit to ensure the accuracy, consistency and much more of audit reports. GAAS are generaaly divided into 3 groups which are as follows:-

a) General Standards- These standards are basically guidelines for the auditors and his ethical behaviour while performing the audit. There are 3 standards components under this category:-

(i) The auditor should perform his audit independently while dealing with the matters of the audit.

(ii) Auditor should posses adequate knowledge and should be completely proficient for performance of audit.

(iii) While preparing he audit report, auditor should maiantain full professional care.

b) Standards of field work - These standards will dictate the planning and sampling for the audit and the course of action which an auditor needs to follow. There are three components under this category which are as follows:-

(i) Auditor should plan his course of action adequaltely.

(ii) Before commencing any audit, auditor should have the knowledge of business and its working environment and also whether the internal control are sufficient as per the size of organization or not.

(iii) Auditor should have sufficeint and appropriate evidences collected during the audit and also for framing the opionion over the financial statements.

c) Standards of reporting- These standards explains how the audit report should be framed. There are four components under this group:-

(i) After performing all the generally accepted accounting standards the auditor should also mention the same in audit report.

(ii) Auditor should determine and report whether the disclosures are reasonable adequaltely informative or not.

(iii) Any deviation in principles from the preceding year to current year should also be reported.

(iv) Auditor should frame an opionion regarding the financial statements and if its is feasible the auditor must mention the remarks for the same.

Above all are the components of Generally accepted auditing standards.

Note:- As per the instructions given to us, we can only answer one question at a time so student is requested to ask other questions as individual questions