This is to prevent companies from misstating their financial reports especially if it has the intention to mislead the public and its stakeholders on its true economic standing. The government had imposed rules and regulations as well as guidelines on how these financial statements are made. Thus, business entities have to accurately report its economic standing and it is the role of the auditors to render an audit that will accurately show the financial standing of the company with the aid of Generally Accepted Auditing Standards. ![]() Failure to reflect an accurate report will have dire consequences not only to the business organization but also to the other stakeholders. The prepared financial statements will show the financial position, the comprehensive income, the cash flows and the changes in equity of the company. The financial statement will serve as proof on how the entity fared, on whether or not it was able to gain a profit or suffered a loss while conducting its daily business operation. Independence and impartiality are character traits that auditors must nurture and the materiality of an audit finding has an inverse relationship with audit risk.Ī business entity has the need to prepare financial statements that will truly reflect its economic performance within a business cycle. Auditors who considered the report to be free from any material defect can render a report of unqualified opinion and a disclaimer is issued if the auditor will not be able to render a report on the basis of want of sufficient information. The report render can either be qualified opinion, unqualified opinion, adverse opinion and disclaimer of opinion. Auditors can render reports of the financial statements audited in four ways. GAAS are divided into three categories such as the general standards, the standards of fieldwork and standards of reporting. ![]() There is a need for auditors to follow the standards provided to be able to render a report of the financial statements audited stating that it is free from any misstatement. ![]() The Generally Accepted Auditing Standards are standards that were developed by the American Institute of Certified Public Accountants as a foundation in conducting an audit in its reasonable accuracy. The Generally Accepted Auditing Standards Accounting Essay
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