Generally Accepted Auditing Standards

Generally Accepted Auditing Standards, or GAAS are sets of standards against which the quality of audits are performed and may be judged. Several organizations have developed such sets of principles, which vary by territory. In the United States, the standards are promulgated by the Auditing Standards Board, a division of the American Institute of Certified Public Accountants (AICPA).

AU[1] Section 150 states that there are 10 standards:[2] 3 general standards, 3 fieldwork standards, and 4 reporting standards. These standards are issued and clarified Statements of Accounting Standards, with the first issued in 1972 to replace previous guidance. Typically, the first number of the AU section refers to which standard applies. However, in 2012 the Clarity Project significantly revised the standards and replaced AU Section 150 with AU Section 200, which does not explicitly discuss the 10 standards.[3][4]

In the United States, the Public Company Accounting Oversight Board develops standards (Auditing Standards or AS) for publicly traded companies since the 2002 passage of the Sarbanes-Oxley Act; however, it adopted many of the GAAS initially. The GAAS continues to apply to non-public companies.


  1. The auditor must maintain independence in mental attitude in all matters related to the audit.
  2. The auditor must have adequate technical training & proficiency to perform the audit.
  3. The auditor must exercise due professional care during the performance of the audit and the preparation of the report.

Standards of Field Work

  1. The auditor must adequately plan the work and must properly supervise any assistants.
  2. The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.
  3. The auditor must obtain sufficient appropriate audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit.
  4. The auditor must assign qualified personnel to the engagement.

Standards of Reporting

  1. The auditor must state in the auditor's report whether the financial statements are presented in accordance with generally accepted accounting principles.
  2. The auditor must identify in the auditor's report those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.
  3. When the auditor determines that informative disclosures are not reasonably adequate, the auditor must so state in the auditor's report.
  4. The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed, in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report. In all cases where an auditor's name is associated with financial statements, the auditor should clearly indicate the character of the auditor's work, if any, and the degree of responsibility the auditor is taking, in the auditor's report.

Clarity Project

In 2004, a project was begun to clarify and converge the standards with the International Standards in Auditing (ISAs). Many of the AU sections are being remapped as part of the Clarity Project.[5] In October 2011, SAS 122 was issued which superseded all previous SASes except 51, 59, 65, 87, and 117-20.[6] In the interim period, these new AU sections are referred to as AU-C until 2014.[6] The AICPA provides a list of the AU-C standards.[7]


International Standards on Auditing are stated by the International Auditing and Assurance Standards Board of the International Federation of Accountants. Derivatives of ISAs are used in the audit of several other jurisdictions, including the United Kingdom.

See also


  1. Note that AU stands for audit, not separate words. See Alphabet Soup: A Director’s Guide to Financial Literacy and the ABCs of Accounting and Auditing.
  2. AU Section 150: Generally Accepted Auditing Standards. AICPA.
  3. Morris JT, Thomas T. (2011). Clarified Auditing Standards: The Quiet Revolution. Journal of Accountancy.
  4. Summary of Differences Between Clarified SASs and Existing SASs. AICPA.
  5. The AICPA’s Guide to Clarified and Converged Standards for Auditing and Quality Control. AICPA.
  6. 1 2 Clarity Project: Questions and Answers.
  7. Clarified Statements on Auditing Standards. AICPA.
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