Generally Accepted Auditing Standards Paper Essay

Generally Accepted Auditing Standards Paper - Essay Example The audit opinion resulting from verification of financial statements provides a reasonable assurance that the statements give a true and fair value in accordance with the frameworks of financial reporting; therefore, Mobitech Accessories Ltd. does not expect auditors to produce absolute assurance by detecting all aspects of errors and fraud. Types of audits that organizations can perform include statutory, internal, external, and compulsory audits. Various standards, Acts, and boards have been initiated to guide the auditing function. Generally Accepted Auditing Standards provides a basis for performing and judging the quality of audits (Catty, 2012). The general requirements of GAAS include maintenance of independence in audit matters, adequate technical training, and proficiency for audit performance, and exercising professional care during audit performance and report preparation. Mobitech Accessories Ltd enables auditors to obtain sufficient understanding of the enterprise and allows auditors to access sufficient evidence by performing audit procedures in accordance with GAAS. GAAS also require the auditor to express an opinion regarding the financial statements; an opinion can be qualified, unqualified or disclaimer (Huault & Richard, 2012). Mobitech Accessories Ltd auditors usually state reasons in the report where they cannot express an overall opinion. GAAS provide assumptions, principles, and constraints to achieve basic objectives and implement fundamental qualities (Huault & Richard, 2012). The accounting entity assumption assumes that the business entity is a being and separate and distinct from its owners and managers. The going concern assumption assumes that the business will remain in operation indefinitely. The historical cost principle requires companies to report their liabilities and assets based on costs of acquisition rather than fair market value. The principle of revenue