Statement on Auditing Standards Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Generally Accepted Auditing Standards

Article excerpt

Statement on Auditing Standards (SAS) Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards supersedes: SAS No. 1, sections 110, Responsibilities and Functions of the Independent Auditor, 201, Nature of the General Standards, 210, Training and Proficiency of the Independent Auditor, 220, Independence, and 230, Due Professional Care in the Performance of Work (AICPA, Professional Standards, vol. 1, AU secs. 110, 201, 210, 220, and 230); SAS No. 25, The Relationship of Generally Accepted Auditing Standards to Quality Control Standards (A1CPA, Professional Standards, vol. 1, AU sec. 161); SAS No. 95, Generally Accepted Auditing Standards (AICPA, Professional Standards, vol. 1, AU sec. 150); and SAS No. 102, Defining Professional Requirements in Statements on Auditing Standards (AICPA, Professional Standards, vol. 1, AU sec. 120).

CONTENTS
Introduction
Scope of This Statement on Auditing
  Standards/1-2
An Audit of Financial Statements/3-9
Effective Date/10
Overall Objectives of the Auditor/11-12
Definitions/13
Requirements
Ethical Requirements Relating to an Audit of
  Financial Statements/14
Professional Skepticism/15
Professional Judgment/16
Sufficient Appropriate Audit Evidence and Audit
  Risk/17
Conduct of an Audit in Accordance With GAAS
  /18-27
Application and Other Explanatory Material
  An Audit of Financial Statements/A1-A14
Ethical Requirements Relating to an Audit of
  Financial Statements/A 15-A20
Professional Skepticism/A21-A25
Professional Judgment/A26-A30
Sufficient Appropriate Audit Evidence and Audit
  Risk/A31-A55
Conduct of an Audit in Accordance With
  GAAS/A56--A85

Exhibit: Comparison of Requirements of Statement on Auditing Standards Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards With Requirements of International Standard on Auditing 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With International Standards on Auditing/A86

INTRODUCTION

Scope of This Statement on Auditing Standards

1. This Statement on Auditing Standards (SAS) addresses the independent auditor's overall responsibilities when conducting an audit of financial statements in accordance with U.S. generally accepted auditing standards (GAAS). Specifically, it sets out the overall objectives of the independent auditor (the auditor) and explains the nature and scope of an audit designed to enable the independent auditor to meet those objectives. It also explains the scope, authority, and structure of GAAS and includes requirements establishing the general responsibilities of the independent auditor applicable in all audits, including the obligation to comply with GAAS.

2. GAAS are developed and issued in the form of SASs and are codified into AU sections in volume 1 of AICPA Professional Standards. GAAS are written in the context of an audit of financial statements by an auditor. They are to be adapted as necessary in the circumstances when applied to audits of other historical financial information. GAAS does not address the responsibilities of the auditor that may exist in legislation, regulation, or otherwise in connection with, for example, the offering of securities to the public. Such responsibilities may differ from those established in GAAS. Accordingly, although the auditor may find aspects of GAAS helpful in such circumstances, it is the responsibility of the auditor to ensure compliance with all relevant legal, regulatory, or professional obligations.

An Audit of Financial Statements

3. The purpose of an audit is to provide financial statement users with an opinion by the auditor on whether the financial statements are presented fairly, in all material respects, in accordance with an applicable financial reporting framework, which enhances the degree of confidence that intended users can place in the financial statements. …