Importance of GAAS in Evidence Gathering and Fraud Consideration

School: University of Phoenix - Course: BSA 505 - Subject: Accounting

Individual: Evidence Gathering BSA/505 August 7, 2017 Udaya Tejwani

Evidence Gathering The GAAS or generally accepted auditing standards are a set of systematic guidelines that are basically used by auditors on relation to audits that are conducted for various industries (Investopedia, 2017). These standards help to ensure the overall accuracy, verifiability and consistency of auditor's reports and actions.Using this can help reduce the potential for missing material information. Once evidence is gathered, it will need to go through a proper and thorough review to determine its validity. Ensuring that the evidence is sound is important as the process moves forward. It is important to know the positions and the duties of all IS/IT employees and managers when collecting evidence. Each employee has different responsibilities and tasks within the organization.Gathering incorrect evidence for an employee or manager could possibly tarnish the evidence that was gathered. Ensuring that everything is precise is extremely important as part of the evidence gathering and validation. Grades will be performed by submitting a summary of findings for the graded evidence for evaluation prior to the write up of the primary results and preparation of the summarized version, which should help to ensure the grades are optimal. The ISA 240 deals with the auditor's responsibility to properly consider fraud as part of the audit in particular with financial statements. This helps to distinguish fraud from errors and describes the two potential types of fraud that would be relevant to the auditor, and that would be misstatements resulting from misappropriation of assets and misstatements resulting from fraudulent financial reporting (IFAC, 2014). Controls except for possibly automated controls, suffer from atrophy. Employees can simply fail to follow standard operating procedures for business processes or for executing

Because this is a Premium document. Subscribe to unlock this document and more.

controls, such as manual controls. Basically internal controls are a process to make sure that an achievement for an organization's objectives are in operational effectiveness and efficiency, and they are reliable in regards to financial reporting and are in compliance with laws, policies and regulations.