3.

The general accepted auditing standards (GAAS) are the standards you use for auditing private
companies. GAAS come in three categories: general standards, standards of field work, and standards of
reporting.

Keep in mind that the GAAS are the minimum standards you can use for auditing private companies.
Additionally, the public company Accounting oversight Board (PCAOB) has adopted these standards for
public (traded on the open market) companies. Each audit engagement you work on may require you to
perform audit work beyond what’s specified in GAAS in order to appropriately issue an opinion that a
set of financial statements is fairly presented. You need to use professional judgment and exercise due
care in following all standards, PCAOB ten auditing standards, which grouped into three categories are
as follow;

General standards:

The first three GAAS are general standards that address your qualifications to be an auditor and the
minimum standards of your work product:

 As an auditor, you must have both adequate training and proficiency. The audit is to be
performed by a person or persons having adequate technical and proficiency as an auditor.
 You are independent in both fact and appearance. In all matters relating to the assignment,
independence in mental attitude is to be maintained by the auditor or auditors.
 You exercise due professional care in performing your auditing tasks.

Standards of fieldwork:

The next three GAAS govern how you actually do your job;

 Your work is adequately planned and all assistants are properly supervised.
 You gain an understanding of the client and its environment, including internal controls, to
assess risk of material misstatement in financial statement and to plan your audit. A sufficient
understanding of internal control is to be obtained to plan the audit and to determine the
nature, timing and extent of tests to be performed.
 The evidence you gather during audits is appropriate and sufficient to evaluate management’s
assertions on the financial statements. Sufficient appropriate evident matter is to be obtained
through inspection, observations, inquires and confirmations to afford a reasonable basis for an
opinion regarding the financial statements under audit.

Standards of reporting:

The last four GAAS concern information you must consider prior to issuing your audit reports.