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Generally Recognized Auditing Criteria Paper Madeline Cates ACC/491 Contemporary Auditing 1 November 7, 2012 Thomas A. House Auditing is extremely important to the businesses, each of our state and federal government, investors, banking companies, and each of our overall economic system. Without auditing there would be plenty of room pertaining to mistakes.

Boynton & Manley (2006) determine auditing while the following, “A systematic means of objectively obtaining and considering evidence with regards to assertions about economic activities and incidents to ascertain the degree of correspondence among those assertions and proven criteria and communicating the results to interested users (p. ). To be able to it straight down auditing uses a certain process of steps using financial statements and tax returns to evaluate a company in an neutral way. When this is carried out a drafted report is done by the auditors to give the firm the believability they are worthy of. This reliability is transferred to interested users including, banks, stockholders, and managing. The purpose of this paper is always to explain the nature and functions of auditing, and relate them to a company in which we are familiar. The corporation is that i am acquainted with is Chili’s Bar and Grill where I have been a staff for over four years.

Chili’s is possessed by Brinker Nation, which is publically traded on the Nyse under the symbol EAT. Brinker Nation is definitely audited by independent auditing committee without relation to the organization, they the actual standard in the NYSE as well as the Securities and Exchange (SEC). The Generally Recognized Auditing Standards (GAAS) are a set of specifications that open public accountants are required to use. As a whole there are twelve different GAAS that are used to determine the quality of functionality and the overall objectives being achieved in a financial declaration audit. Boynton & Johnson, 2006) The commonly Accepted Accounting Standards apply to financial, operational, and complying audits. Commonly a CERTIFIED PUBLIC ACCOUNTANT preforms monetary audit by simply evaluating a firm’s budget to see if they are really using GAAP. The the desired info is then distributed to the average person. A compliance audit focuses on whether or not a strong is subsequent rules and government rules, such as the Sarbanes-Oxley Act that will need duel-purpose auditing and conformity audits.

Detailed audits give attention to activities pertaining to objectives. This is also known as a managing audit. The Sarbanes-Oxley Work of 2002 and the Public Company Accounting Oversight Board (PCAOB) affect publically traded companies. The PCAOB is a exclusive sector that was created by the SOX Work of 2002. Basically the PCAOB oversees auditors of publically traded businesses to protect investors, creditors, plus the general public. In respect to Boynton & Meeks (2006), the PCAOB was handed authority in 5 major areas which include, 1 .

Registering public accounting firms that audit the financial statements of community companies. installment payments on your Setting quality control criteria for expert review of auditors of general public companies and conducting examinations of registered public accounting firms. a few. Setting auditing standards for audits of public companies. 4. Environment independence and ethics guidelines for auditors of public companies. a few. Performing various other duties or functions to market high professional standards? to get public organization audits, and enforce conformity with the Sarbanes-Oxley Act of 2002.

By using the SEC, PCAOB, SOX Act, and GAAS we could ensure traders and collectors that publically traded businesses are delivering honest, reasonable, and straightforward monetary information. Auditing is vital for the growth of each of our businesses, the local and federal government, and our economic system as a whole. Resources Boynton, Watts. C., & Johnson, Ur. N. (2006). Modern auditing: Assurance providers and the ethics of financial reporting. (8th ed. ). Hoboken, NJ: Wiley. Louwers, T., Ramsay, L., Sinason, M., & Stawser, J. Ur.. (2007). Auditing and guarantee services. New York, NY: McGraw-Hill.