Faculty of Business

accounting school

ACADEMIC REPORT

COURSE:

AUDITORÍA FINANCIERA

AUTHOR:

FERNANDEZ GREGORIO, ARIANA YURIKO

        

TEACHER:

MALCA LEON, JOSE RUBIN 

Sede - Perú

2023

1
INDEX
INTRODUCTION 3
DEVELOPMENT 5
CONCLUSION 8
BIBLIOGRAPHIC REFERENCES 10

2
INTRODUCTION
Generally Accepted Auditing Standards (GAAS) are a set of principles and
procedures that govern assessment practice. These rules are established by
professional accounting and auditing bodies, and are intended to ensure the
quality, integrity, and objectivity of audit work. At present, the NAGAs are widely
applied throughout the world and are followed by the auditor in the execution of
their work. These standards provide a solid framework for conducting audits
consistently and efficiently, ensuring that ethical and professional standards are
met.

NAGA covers various aspects of an audit, including the planning and execution
of the audit, the collection and evaluation of evidence. The communication of
the findings of the issuance of reports. These standards are aimed at promoting
the independence of auditors, the objectivity of accounting judgments and
professional care in the performance of their work. Adoption and enforcement is
critical to maintaining public confidence in financial reporting and the audit work
of auditors.

 By following these standards, it is ensured that auditors carry out their work
rigorously and can properly observe and communicate margins of error and
deficiencies in the financial statements of organizations.The main objectives of
the Generally Accepted Auditing Standards (GAAS). It is to establish the
standards and principles that auditors must follow when carrying out their work.
These standards are designed to promote the quality, integrity, and objectivity of
audits, and to ensure that ethical and professional standards are met.

Some specific objectives of the NAGAs are:

⮚ Promote trust and credibility: The NAGAs seek to foster public

confidence in the financial information of organizations, by ensuring that
auditors carry out their work in a rigorous and professional manner. This
contributes to the credibility of the accounts and increases the
confidence of the users of the information.

⮚ Establish consistent standards: GAAS establish a common and

consistent framework for audit practice, which facilitates comparability
and understanding of audit reports. By following these standards, you
ensure that auditors apply consistent principles and procedures in
performing their work.

⮚ Improve the quality of audits: NAGAs seek to raise the quality of audit
work, promoting the adoption of best practices, systematic approaches
and appropriate procedures. This includes proper audit planning,
obtaining and evaluating evidence, and effective communication of
findings.

3
 ⮚ Protect the public interest: NAGAs aim to protect the public interest by
setting ethical and professional standards for auditors.

This implies maintaining independence, objectivity, and professional diligence in

conducting audits, which contributes to the reliability of audit reports and
informed decision-making.

Generally Accepted Auditing Standards (GAASs) play a fundamental role in the

field of auditing and are of great importance. Some of the reasons why NAGAs
are important are as follows:

⮚ Professional standards: The NAGAs establish the professional standards

that auditors must follow when performing their work. They provide a
strong and consistent framework for auditing practice, ensuring that
auditors follow proper procedures and approaches in their engagements.
This helps maintain consistency and quality across audits conducted
across different organizations and sectors.

⮚ Credibility and trust: NAGAs contribute to the credibility and trust in audit
reports. By following these rules, auditors can demonstrate that they
have carried out their work in accordance with recognized professional
principles. This gives users of financial information, such as investors,
creditors and other interested parties, greater confidence in the veracity
and reliability of the audited financial statements.

⮚ Protection of the public interest: The GAAS are designed to protect the
public interest by establishing ethical and professional principles for
auditors. These standards promote independence, objectivity and
professional diligence in conducting audits, which ensures that auditors
act for the benefit of society in general. By maintaining high standards of
ethics and professionalism, it seeks to safeguard the interests of users of
financial information and the integrity of the audit process.

⮚ Comparability and understanding: The NAGAs facilitate the comparability

and understanding of audit reports. By following a common framework,
auditors apply consistent principles and procedures, enabling users of
financial information to understand and compare the results of different
audits. This is especially relevant in the case of companies that operate
in multiple jurisdictions, since the NAGAs provide a uniform approach to
the practice of auditing.

NAGAs are important because they set professional standards, promote

credibility and confidence in audit reports, protect the public interest, and
facilitate comparability and understanding of audit results. By following these
standards, a rigorous, ethical and consistent audit practice is ensured, which
benefits organizations, investors and society in genera

4
DEVELOPMENT
The development of Generally Accepted Auditing Standards (GAASs) has been
a continuous and evolutionary process over time. NAGAs are created and
maintained by professional accounting and auditing bodies. The development of
NAGAs is described in general terms below:

✔ Identification of needs: Professional bodies, in collaboration with audit

professionals, identify the needs and demands of financial users and the
challenges auditors face in practice. This includes considering changes
in the business environment, technological advances and regulatory
developments.

✔ Investigation and analysis: A thorough investigation and analysis of the

identified problems and challenges is carried out. Academic studies,
practices and approaches adopted in different jurisdictions are
considered, and relevant information is collected from interested parties,
including audit professionals, companies and regulators.

✔ Preparation of drafts: According to the results of the investigation and

analysis. Draft NAGAs are developed. These drafts contain principles
and guidelines for conducting the audit, addressing aspects such as
audit planning, evidence gathering, risk assessment, and reporting.

✔ Public consultation: Draft NAGAs are submitted to public consultation,

which allows audit professionals, companies and other interested parties
to review and provide comments on the proposals. This encourages
participation and diversity of perspectives, enriching the standards
development process.

✔ Review and improvement: The comments received during the public

consultation are analyzed and revisions and improvements are made to
the draft NAGAs. It seeks to reach a consensus and balance between
the various opinions and needs, with the aim of establishing effective and
practical standards.

✔ Issuance of the NAGAs: Once the review and improvement is completed,

the updated NAGAs are officially issued. These standards come into
effect on a certain date and auditors are expected to apply them in their
audit work.

5
It is very important that NAGAs be an ongoing process, as standards must
adapt as business practices, risks, and developments in the audit profession
evolve. Therefore, professional bodies regularly review and update NAGAs to
ensure they remain relevant and effective in the changing environment.

Generally Accepted Auditing Standards (GAASs) are a set of standards and

guidelines that govern the practice of financial auditing. These standards are
used worldwide to ensure the quality, objectivity and integrity of audit reports.
The following is the classification of the NAGAs:

1. 1. Personal rules:

- Integrity: Auditors must be honest and trustworthy in all aspects of their audit
work.

- Objectivity: Auditors must maintain an objective stance and ensure that

biases, conflicts of interest, or outside influences do not adversely affect their
professional judgment.

- Professional competence and diligence: Auditors must possess the technical

knowledge and skills necessary to conduct an audit and must exercise due
diligence in planning and executing their work.

2. Work execution rules:

- Planning and supervision: The evaluators must plan the evaluation properly
and supervise the work of the team members.

- Obtaining sufficient and relevant evidence: Auditors must obtain adequate,

reliable and sufficient audit evidence to support their conclusions and opinions.

- Risk assessment and internal control: The auditor must assess the risks of
material errors or irregularities in the financial statements and must obtain an
understanding of the client's internal control to design the appropriate methods.

3. Information and documentation standards:

-Assurance Documentation: The auditor must prepare and maintain adequate

documentation that provides evidence of the steps taken, the conclusions
reached, and the results obtained.

- Audit report: The auditor must prepare a clear and objective report
containing an opinion on whether the financial statements are fairly presented in
accordance with applicable accounting standards.

It is important to note that these classifications are based on the NAGAs issued
by professional organizations of accountants and auditors, such as the
International Auditing and Assurance Standards Board (IAASB) and the
American Institute of Certified Public Accountants (AICPA). The specific
requirements of the NAGAs may vary slightly between countries or jurisdictions,

6
but in general, these standards form the basis for the practice of financial
auditing worldwide.

Generally Accepted Auditing Standards (GAASs) have several important uses

in the field of financial auditing. Some of the main utilities are the following:

❖ Professional standards: The NAGAs establish a common framework of

standards and guidelines that auditors must follow when performing their
work. They provide a set of established principles and practices that help
ensure quality and consistency in conducting audits.
❖ Improving audit quality: By following the NAGAs, auditors can ensure
that their work meets the most rigorous professional and ethical
requirements. This improves audit quality and increases user confidence
in audit reports.

❖ Guidance on planning and performing audits: NAGAS provide clear

guidance on planning and performing audits. They establish appropriate
procedures and approaches for obtaining sufficient appropriate audit
evidence, assessing risks, evaluating internal control, and performing
substantive tests.

❖ Legal and regulatory framework: NAGAS are often recognized and

supported by regulators and government entities. Their compliance may
be a legal requirement for auditors wishing to practice in certain
jurisdictions. NAGAs can also provide a basis for dispute resolution and
compliance with legal and regulatory requirements.

❖ Trust and credibility: NAGAs help establish a common standard for audit
practice. By following these standards, auditors demonstrate their
commitment to quality, objectivity, and integrity in their work. This builds
trust and credibility in audit reports and strengthens the trust of users of
financial information.

NAGA is very useful as it provides a framework for conducting quality audits,

provides guidance in planning and performing audits, and contributes to
improving trust and credibility in audit reports.
Generally Accepted Auditing Standards (GAASs) require planning and
supervision in financial auditing for several fundamental reasons:

▪ Efficiency and effectiveness: Proper planning allows establishing a clear

strategy and a structured approach to carry out the audit. The plan
establishes the objectives, scope, and procedures necessary to obtain
sufficient appropriate audit evidence.

This helps maximize the efficiency and effectiveness of your audit work.

7
 ▪ Identification and evaluation of risks: Planning allows the identification
and evaluation of the significant risks associated with the audited entity
and its environment. By understanding the risks, auditors can design
specific procedures to adequately address them and obtain reasonable
assurance that the financial statements are free from material
misstatement.

▪ Coordination and assignment of tasks: Planning involves the

coordination and assignment of tasks to the members of the audit team.
It allows establishing clear responsibilities and assigning adequate
resources for each area or aspect of the audit. This ensures that the
work is carried out efficiently and that all relevant aspects are duly
reviewed.
▪ Supervision and review of work: Supervision is essential to ensure that
the audit work is carried out in accordance with the GAAS and
established procedures. Supervisors review and evaluate the work
performed by team members, provide guidance, clarify doubts, and
ensure quality and consistency throughout the audit process.

▪ Quality and reliability of the audit report: Proper planning and supervision
contribute to the quality and reliability of the audit report. By having a
planned approach and effective supervision, the likelihood of identifying
significant findings and disseminating an informed opinion on the viability
of the financial statements is increased

Planning and monitoring are essential aspects of NAGAs because they enable
efficient auditing, identify and address risks, coordinate team work, ensure the
quality and consistency of the work performed, and ensure the reliability of audit
reports.

These practices are critical to conducting high-quality audits and protecting the
public interest in providing an independent opinion on an entity's financial
statements

CONCLUSION
Generally Accepted Auditing Standards (NAGAS) are fundamental in the field of
financial auditing. Its usefulness lies in establishing standards and guidelines
that guarantee quality, objectivity, and integrity in conducting audits. These
standards provide a common framework, improve the quality of audits, guide
planning and execution of work, and promote trust and credibility in audit
reports. By following the NAGAs, auditors demonstrate their commitment to
professional excellence and ensure that users of audit reports can rely on the
information presented. In summary, the NAGAs are essential to guarantee the
practice of rigorous and reliable audits, which contributes to trust and
transparency in the financial field.

In conclusion, the Generally Accepted Auditing Standards (NAGAS) play a

8
fundamental role in financial auditing by establishing standards and guidelines
that guarantee the quality, objectivity and integrity of audit reports. These
standards provide a common framework that helps auditors plan, execute, and
present their findings effectively. By following the NAGAs, auditors ensure that
their work meets the most rigorous professional and ethical requirements,
increasing trust and credibility in audit reports.

In addition, they cover various areas, such as personal standards, work

performance, and information and documentation, and are applied throughout
the audit process. These standards promote efficiency in the execution of work,
the proper identification and assessment of risks, the coordination and
supervision of the team, and the quality of the final audit report.

By following the NAGAs, auditors contribute to transparency and confidence in the

financial arena by providing an independent assessment of an entity's financial
statements. NAGAs also serve as a legal and regulatory framework recognized by
authorities and users of audit reports.

9
BIBLIOGRAPHIC REFERENCES
Accepted, N.D.A.G. (1993). Generally Accepted Auditing Standards.
https://d1wqtxts1xzle7.cloudfront.net/35810636/Normas_Pcgas-libre.pdf?14175
73573=&response-content-disposition=inline%3B+filename%3DNORMAS_PC
GA_s.pdf&Expires=1686841165&Signature=AroblXjVGsbQnvO3x3zCt1FFUIHx
pEGm-pgYyE8-Sub9GWBE8X4nqLADpSKt407B2Zk6AxQCsEjU5kTQQDMTaP
tXwJgvV43E58Cal6vkI4icEwarYwRaE3Tw6t7FHCZkYV7rIpvVSR8sJSQ8uBF6
g4UtY9YSBQCL3U2e0P9hhOnNYCmRol~yFQF8g4TQ~ZmYw4l-cukrq5kAHm
CKQCd4XPcPG8QGfBrD3KrVxuKCCt4gefrP1hWpZfTzGjFe0istJcgAV9qD6bcZ
ys9JzMbh6jNtCHReVQAHIEBAoyn-AvTSg-V~PWAasqXi6QioJ0OKfJiL857vu9r
1NWPVgkxkZQ__&Key-Pair-Id=APKAJLOHF5GGSLRBV4ZA

Bardales Rios, M.M. (2018). Financial audit.

https://alicia.concytec.gob.pe/vufind/Record/UNAP_8f3a7a7946967d7ffe262bfa
870c78b4

Villamizar Bonilla, MC (2014). Comparative analysis between generally

accepted auditing standards (NAGAS) and international auditing standards
(NIAS), referring to the auditor's responsibilities (NIAS 200 to 265).
https://bibliotecadigital.univalle.edu.co/handle/10893/17327

Jiménez Pulido, L. F., & Olachica Murcia, M. (2016). Comparative analysis of

the presentation of a transparent audit report regarding the NAGAS, fiscal
auditing and ISA.
https://ciencia.lasalle.edu.co/cgi/viewcontent.cgi?article=1640&context=contadu
ria_publica

Mejía Arboleda, Y. (2017). Differences and similarities between the international

auditing standard-NIA 200, the code of ethics for accounting professionals, with
respect to the auditing standards generally accepted in Colombia-NAGA.
https://repository.unilibre.edu.co/handle/10901/11514

10