Generally Accepted Auditing Standards

Topics: Auditing, Financial audit, Finance Pages: 2 (625 words) Published: November 26, 2012
Generally Accepted Auditing Standards Paper
Madeline Cates
ACC/491 Contemporary Auditing 1
November 7, 2012
Thomas A. House

Auditing is extremely important to our businesses, our state and federal government, investors, banks, and our overall economy. Without auditing there would be plenty of room for mistakes. Boynton & Johnson (2006) define auditing as the following, “A systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users” (p. 6). To break it down auditing follows a certain process of steps using financial statements and tax returns to evaluate an organization in an unbiased way. Once this is done a written report is made by the auditors to give the organization the credibility they deserve. This credibility is passed on to interested users such as; banks, stockholders, and management. The purpose of this paper is to explain the nature and functions of auditing, and relate them to an organization in which we are familiar.

The organization is which I am familiar with is Chili’s Bar and Grill where I have been an employee for over 4 years. Chili’s is owned by Brinker Nation, which is publically traded on the New York Stock Exchange under the symbol EAT. Brinker Nation is audited by independent auditing committee with no relation to the company, they follow the standard of the NYSE as well as the Securities and Exchange (SEC).

The Generally Accepted Auditing Standards (GAAS) are a set of standards that public accountants are required to use. All together there are 10 different GAAS that are used to establish the quality of performance and the overall objectives to be achieved in a financial statement audit. (Boynton & Johnson, 2006)

The Generally Accepted Accounting Standards apply to financial, operational, and compliance audits....
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