What is an audit? General framework defined at overall level by a new SAS

One of the new SAS that will go into effect at the end of 2012 provides an explanation of the overall objective of an audit and how to conduct an audit at an overall conceptual level.  This provides the framework of an audit under GAAS.

You would do well to read this SAS cover to cover as you start to get up to speed on the complete overhaul of the entire body of GAAS.  Here are a few highlights.

The name is a mouthful:  Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards. 

All of the new, clarified, or rewritten SASs can be found here. This specific one can be found here

Just a few tidbits from this SAS:

  • It defines 20 key terms that will be used throughout GAAS
  • It distinguishes between management and auditors responsibility
  • It defines and explains professional skepticism and professional judgment 

The new SASs will all be written with the requirements up front with all of the explanatory material behind.  It might be appealing to just read the requirements and blow off the rest of the document.

Not a smart move in general since you would miss a lot of guidance.  Really bad idea in particular because the SAS says that the auditor should be familiar with all of the application and other explanatory material in the back of each SAS.

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