Generally accepted auditing standards (GAAS)
The term Generally Accepted Auditing Standards, often shortened to GAAS, refers to a set of ideas which serves as a framework for the various processes falling under the main activity, which is auditing. Since the reports produced after an audit may have a great impact on the future of a company, it is especially important that auditing processes are kept uniform and are conducted in a fair and systematic manner. The data and analysis must also be accurate, because any discrepancy between the report and the actual situation may lead to incorrect and potentially disastrous consequences.
The GAAS helps avoid such problems by making sure that auditors are on the same page when it comes to the conduct of auditing activities. Auditors must be very familiar with the general standards of auditing, as well as comply with the standards set for fieldwork activities. This helps ensure that the kind of data collected for each company is the same. Standards are also set for the process of reporting findings. In this way, consistency and reliability, and verifiability of data are ensured.
It must be noted, however, that while many auditing concepts may be similar across regions, the accepted standards may still differ in some ways from one country to another. In the United States, for instance, it is the American Institute of Certified Public Accountants which put the US GAAS in place. On the other hand, other countries use the ISA, or International Standards on Auditing, as their basis. This was developed by the auditing arm of the International Federation of Accountants.