Generally Accepted Auditing Standards [GAAS] Law and Legal Definition

Generally Accepted Auditing Standards (GASS) is a set of guidelines issued by the American Institute of Certified Public Accountants. It establishes standards to be followed by an auditor in his/her profession. The GASS also lays down the criteria for auditor’s examination and required reports. However, the standards adopted by the GASS may vary from place. The U.S. GASS lays down ten auditing standards developed by the American Institute of Certified Public Accountants. [United States v. Arthur Young & Co., 465 U.S. 805 (U.S. 1984)]

Some of the standards laid under the U.S. GASS are:

1.An auditor must have adequate technical training and proficiency to perform an audit;

2.An auditor must maintain independence in mental attitude in all matters related to an audit;

3.The auditor must use due professional care during the performance of the audit and the preparation of the report;

4.An auditor must adequately plan work and must properly supervise any assistant;

5.An auditor must obtain sufficient understanding of an entity and its environment, including its internal control, in order to assess risk of material misstatement of financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.