Generally Accepted Auditing Standards (GAAS)

Summary

The script explains the concept of GAAP and GAS. GAAP stands for Generally Accepted Accounting Principles, guiding accountants on recording transactions for financial statements. GAS, however, refers to Generally Accepted Auditing Standards, which dictate the audit process for U.S. companies. GAS encompasses PCAOB standards for public companies and ASB standards for private ones, including interpretive publications for applying these standards.

Takeaways

• 📚 GAS stands for Generally Accepted Auditing Standards.
• 🔍 GAS is not the same as GAAP, which stands for Generally Accepted Accounting Principles.
• 🏢 GAS is mandatory for auditing U.S. companies.
• 👀 GAS provides guidance on examining financial statements.
• 📈 It outlines the procedures an auditor should follow during an audit.
• 👥 GAS applies to both public and private company audits.
• 📊 It includes PCAOB standards for public company audits.
• 📜 SAS from the Auditing Standards Board is part of GAS.
• 📘 Interpretive publications are included to guide the application of standards.
• 🏛️ The ASB issues fundamental principles that underpin GAS.

Q & A

What does 'GAS' stand for in the context of auditing?

'GAS' stands for Generally Accepted Auditing Standards, which are the guidelines that auditors must follow when conducting audits in the U.S.

How is GAS different from GAAP?

GAS focuses on auditing procedures, guiding auditors on how to conduct audits, while GAAP (Generally Accepted Accounting Principles) focuses on how transactions should be recorded and reported on financial statements.

Who is responsible for setting the standards under GAS?

Standards under GAS are set by both the Public Company Accounting Oversight Board (PCAOB) and the Auditing Standards Board (ASB), which issues Statements on Auditing Standards.

What types of companies are covered under GAS standards?

GAS standards apply to both public and private company audits, meaning they cover audits of issuers (public companies) and non-issuers (private companies).

What are PCAOB standards and how do they relate to GAS?

PCAOB standards are auditing standards set by the Public Company Accounting Oversight Board and are part of the broader Generally Accepted Auditing Standards (GAS) used in auditing U.S. companies.

What is the role of the Auditing Standards Board (ASB) in GAS?

The ASB issues Statements on Auditing Standards (SAS) and fundamental principles that guide the application of auditing standards under GAS.

What are the fundamental principles of GAS issued by the ASB?

The fundamental principles issued by the ASB under GAS are: responsibilities, performance, and reporting.

What is the significance of interpretive publications in GAS?

Interpretive publications provide guidance on how to apply relevant auditing standards in specific situations, helping auditors understand and follow GAS properly.

Does GAS only apply to U.S.-based companies?

Yes, GAS primarily applies to U.S.-based companies and governs the auditing standards auditors must follow when conducting audits within the U.S.

How does GAS ensure consistency in auditing practices?

GAS ensures consistency by providing a standardized set of procedures and principles for auditors to follow, ensuring uniformity in how audits are conducted across different companies.