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H: General Standards
Independence
In all matters relating to the audit work, the audit organization and the individual auditors, whether government or public, should be free both in fact and appearance, from personal, external, and organizational impairments to independence.
Professional Judgment
Professional judgment should be used in planning and performing audits and in reporting the results. This standard requires auditors to exercise reasonable care and diligence and to observe the principles of serving the public interest and maintaining the highest degree of integrity, objectivity, and independence in applying professional judgment to all aspects of their work. This standard also imposes a responsibility upon each auditor performing work under GAGAS to observe GAGAS. In addition, auditors should use professional judgment in determining the type of assignment to be performed and the standards that apply to the work; defining the scope of work; selecting the methodology; determining the type and amount of evidence to be gathered; and choosing the tests and procedures for their work. Professional judgment also should be applied in performing the tests and procedures and in evaluating and reporting the results of the work.
Competence
The audit staff assigned to perform the audit should collectively possess adequate professional competence for the tasks required.
Qualifications for staff members conducting audits include:
knowledge of GAGAS applicable to the type of work they are assigned and the education, skills and experience to apply such knowledge to the work being performed;
general knowledge of the environment in which the audited entity operates and the subject matter under review;
skills to communicate clearly and effectively, both orally and in writing; and
skills appropriate for the work being performed.
To meet this standard, auditors performing work under GAGAS, including planning, directing, performing field work, or reporting on an audit under GAGAS, need to maintain their professional competence through continuing professional education (CPE). Each auditor performing work under GAGAS should complete, every 2 years, at least 80 hours of CPE that directly enhance the auditor's professional proficiency to perform audits. At least 24 of the 80 hours of CPE should be in subjects directly related to government auditing, the government environment, or the specific or unique environment in which the audited entity operates. At least 20 hours of the 80 should be completed in any 1 year of the 2-year period.
Quality Control and Assurance
Each audit organization performing audits in accordance with GAGAS should have an appropriate internal quality control system in place and should undergo an external peer review.
An audit organization's system of quality control encompasses the audit organization's structure and the policies adopted and procedures established to provide the organization with reasonable assurance of complying with applicable standards governing audits. An audit organization's internal quality control system should include procedures for monitoring, on an ongoing basis, whether the policies and procedures related to the standards are suitably designed and are being effectively applied.
Audit organizations performing audits in accordance with GAGAS should have an external peer review of their auditing practices at least once every 3 years by reviewers independent of the audit organization being reviewed. The external peer review should determine whether, during the period under review, the reviewed audit organization's internal quality control system was adequate and whether quality control policies and procedures were being complied with to provide the audit organization with reasonable assurance of conforming with applicable professional standards. Audit organizations should take remedial, corrective actions as needed based on the results of the review. Audit organizations seeking to enter into a contract to perform an assignment in accordance with GAGAS should provide their most recent external peer review report and any letter of comment, and any subsequent peer review reports and letters of comment received during the period of the contract, to the party contracting for the audit.
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