Generally Accepted Auditing Standards (GAAS) - Essay Example

ements are prepared in accordance with the accounting standards with a view to provide reliable, comparable and very useful information to various stakeholders, but also they are duly audited fairly and reported properly. Given the multiplicity of transactions involved, it is not easy for the ultimate owners to go through each and every entry so as to safeguard their interests. Auditors normally perform such functions. In the United States, the American Institutes of Certified Public Accountants have prescribed Generally Accepted Auditing Standards in order to facilitate fair auditing procedures.

These Auditing standards mostly deal with what auditors should be performing, how they should do the fieldwork and what they should report. These auditing standards specify that audition function should be done by qualified auditors with appropriate technical skills and proficiency, free from such mental attitude that may obstruct auditing process and should have the capability of giving independent opinion on the books of accounts and accounting practices followed. Further, the auditing standards discuss the importance of checks and balances to be instituted by auditors in the fieldwork not only concerning auditing and accounting procedures but supervising assistants.

And, finally, the standards provides a very good description of the meaning of independence that needs to be exercised by auditors while providing opinion. It has to be fair on the issue of comprehensiveness of accounting procedures, their sufficiency, transparency and ability to provide such opinions. Given the institutional feature of corporate America, there is a need to understand the meaning of corporate governance. Though the subject attracted a wider interest with formulation of Cadbury Code by London Stock Exchange in the early 1990s, the collapse of giant organizations like Enron and Worldcom attracted wider interest in United States and elsewhere internationally.

The fall of various public