Question

What is the relationship between U.S. and International Auditing Standards?

Answer 1

Difference between US auditing standards and international auditing standards

Ans:- auditing standards board (ASB) and PCAOB(public company accounting oversight board) these two boards issue rules that become GAAS ( generally acceptable auditing standards)

• International standards on auditing (ISA) are issued by IAASB(international auditing and assurance standards board)
• International standards are the professional standardsfor the performance of the financial audit of the financial statements and financial information
• GAAS are the standards used in united states in order to provide guidance to the external auditors in regard to auditing for non public companies

Documentation	ISA does not require the documents from the auditor to include the abstracts agreements of the auditing procedures	GAAS requires from the auditor to include the copies of significant contracts of auditing procedures
Quality control	It should be completed before the engagement partner dates the auditors report	Quality control review shouldbe completed before the engagement partner releases the auditors report
Going concern considerations	ISA going concern period is atleast one year but not limited to one year	ASB IS looking to see the the extention for thr period of 12 months
Internal control	In 2002 the order has been passed about the internal control to make sure about the financial reporting but unfortunately ISA do not have these requirements expressed in their standards	There is no such requirement in the standards for providing internal control to assess the financial reporting
Risk	ISA specially mentions to obtain understanding of entities business risks both operating risks and strategic risks	ASB auditors are required to assess only the material misstatement based on companies and its operating environment

Note :- strategic risk is nothing but the process of identifying and managing the risk in the organisation’s business strategy including the swift actions when risks are realised