Auditing Research Paper

The auditing profession is made up of individual auditors who should possess a strong ethical framework and report on issues or anticipated issues (Dumon, 2008, par. 3). Auditors review, analyze, and evaluate the process, products, services, systems, organization, and employees (Dumon, 2008, par. 2). Auditors assess the accuracy, validity, reliability, verifiability, and timeliness of organizational information, as well as the sources and processes by which that information is produced (Dumon, 2008, par. 2). Auditors also inspect a organization's internal controls and the extent to which these manage an organization's risk exposures (Dumon, 2008, par. 2). Auditors also ensure that checks are in place to help with the effectiveness of financial and operational reporting. They also make sure checks are in place to protect an organization's assets (Dumon, 2008, par. 3).

There is a difference between accounting and auditing; accounting is the recording, classifying, and summarizing of economic events in a logical manner for the purpose of providing financial information for decision making, while auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria (Elder, Beasley, Arens, 2009, p. 4-6). Accounting provides financial information to users of such information, and auditing is a means to ensure such information is reliable and comforts with established rules and regulations.

The three main types of audits include: operational audit, compliance audit, and financial statement audit. The first type of audit, operational audit, evaluates the efficiency and effectiveness of any part of an organization's operating procedures and methods (Elder, Beasley, Arens, 2009, p. 13). The second type of audit, compliance audit, is conducted to determine whether the auditee is following specific procedures, rules or regulations set by some higher authority (Elder, Beasley, Arens, 2009, p.14). The third type of audit, financial statement audit, is conducted to determine whether the financial statements are stated in accordance with specific criteria (Elder, Beasley, Arens, 2009, p. 14).

Several types of auditors are in practice today, the most common are certified public accounting firms, government accountability office auditors, internal revenue agents, and internal auditors (Elder, Beasley, Arens, 2009, p. 15). A government accountability office auditor works for the U.S. Government Accountability Office, a nonpartisan agency in the legislative branch of the federal government. This auditor would perform the audit function for congress, and it has many of the same responsibilities as a CPA firm (Elder, Beasley, Arens, 2009, p. 15). Internal revenue agents help audit taxpayers' returns to determine whether they have complied with the tax laws (Elder, Beasley, Arens, 2009, p. 16). Internal auditors are employed by companies to audit for management, much as the GAO does for congress, their responsibilities vary considerably depending on the employer (Elder, Beasley, Arens, 2009, p. 16).

Professional accounting organizations provide a place to network with accounting professionals, opportunities to learn about the latest trends in the field, and information on scholarships and internships. A few to name would include: American Accounting Association (AAA), Financial Accounting Standard board (FASB), Institute of Internal Auditors (IIA), and Association of Government Accountants (AGA) (CCSU, 2003, par. 1).

The American Institute of Certified Public Accountants (AICPA) is the world's largest association representing the accounting profession, with nearly 370,000 members in 128 countries. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting; membership is also available to accounting students and CPA candidates. The AICPA sets ethical standards for the profession and U.S. auditing standards for audits of private companies, non-profit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination (AICPA, 2006-2011, P. 1). The CPA Group is an association of independent certified public accounting firms. They come together to provide information for their clients and visitors on the internet to answer any questions.

The PCAOB is directed by the Sarbanes-Oxley Act of 2002 to establish auditing and related professional practice standards for registered public accounting firms to follow in the preparation and issuance of audit reports (PCAOB, 2003-2011, P.1). The broadest available to auditors in the U.S are the 10 Generally accepted auditing standards (GAAS), which are developed by AICP and most recently updated by SAS 105 and SAS 113. GAAS has three categories for their standards; general standards, standards of field work, and reporting standards (Elder, Beasley, Arens, 2009, p. 34). The International Auditing and Assurance Standards Board (IAASB) is an independent standard setting body that serves the public interest by setting high quality international standards for auditing, quality control, review, other assurance, and related services, and by facilitating the convergence of international and national standards