Question

Describe the standard-setting process for auditing. How does this process different from the standard-setting process for accounting?

Answer 1

AUDITING STANDARDS provide minimum guidance for the auditor that helps determine the extent of audit steps and procedures that should be applied to fulfill the audit objective. They are the criteria or yardsticks against which the quality of the audit results are evaluated.

What are the three main sets of auditing standardsused in professional practice by audit firms? International Standards on Auditing, AICPAAuditing Standards, and PCAOB Auditing Standards.

There are three main types of audits: external audits, internal audits, and Internal Revenue Service (IRS) audits. External audits are commonly performed by Certified Public Accounting (CPA) firms and result in an auditor's opinion which is included in the audit report.

“The basic principles for auditing standards are basic assumptions, consistent premises, logicalprinciples and requirements which help in developing auditing standards and serve theAuditors in forming their opinions and reports, particularly in cases where no specific standards apply.”

The ASC adopts a formal and rigorous process in prescribing Financial Reporting Standards (FRS) so as to ensure that the accounting standardsprescribed are of a consistent high quality. The various sectors and stakeholder groups are all given adequate opportunities to express their views.

While setting standards appropriately is critical to making sound student- and policy-level decisions, it is equally important that the content of the test and its difficulty level be appropriate for the decisions to be made based on the test results.

The due process in accounting refers to a series of procedures that entail the collection, processing, and communication of financial data at the end.

In this way the two process is differ from each other.