What are the standards of audit?

In the basic sense, the audit can be defined as exploring and verifying financial reports. The auditors ensure adherence to specific principles. Audit standards accounting experts follow government agencies and financial councils around the world. Some countries may have similar standards, but no two sets are exactly the same. There are many reasons. One of them is that different countries display and practice accounting and financial reporting in very different ways. In most cases, the country's accounting procedures revolve around the needs of its government. No two countries are operated in exactly the same way, so it follows that each country has a special set of rules.

Two of the most popular groups issuing accounting standards are today the Council for fair accounting standards (FASB) and the International Council for Accounting Standards (IASB). FASB is a Council that sets standards for the United States of generally acceptable accounting director (GAAP). Most developed countries have a GAAP ensemble and are the standards within these rules and instructionsaudit. The IASB instructions are called International Financial Reporting Standards (IFRS).

In addition to the basic audit standards that can be found in the GAAP country, two groups have published more specific standards. The US Institute of Certified Public Accountants (AICPA) has created ten -point instructions for generally accepted audit standards (GAAS). This frame includes sections for general standards, work standards and reporting standards. The International Federation of Accountants (IFAC) hosts a group called International Council for Audit and Metal Standards (IAASB), which has developed its own international standards for audit (ISAS). The list of these standards can be displayed on the IFAC website.

Overall, these groups may seem like a lot to keep up with. In fact, there are many other groups that set out the standards of audit, and it is difficult to know fully to know every rule. For an international investmentRY is important to know what standards each country has. Many global trade advisors feel that the mere volume of audit standards cause potential investors to avoid entering the global market. Many government agencies and financial councils agree and began to converge their accounting and audit standards.

FASB and IASB are trying to bring the US Gaap and IFRS to one standard set of rules that businesses can use worldwide. The final result of this convergence is that the company with international negotiations is preparing two sets of financial reports: one according to converged instructions and the other according to the GAAP of their home country. The audit is processed in almost the same way, and each set of financial statements is audited using the standards of the specific group for which it was ready.