The GAAS (Generally Accepted Auditing Standards) provide that those auditing publicly traded firms ought to remain independent in own judgment, have sufficient technical auditing proficiency and training concerning, and exercise proper professional care. The auditors ought to plan audits adequately and supervise own assistants properly (Chambers & Rand, 2011; Giove, 2012). Besides, the GAAS obligate the auditors to obtain adequate appreciation of their clients and their operational environments, and obtain adequate and proper audit evidence. During reporting, the auditors ought to document whether reports are in compliance with GAAPs, whether the attendant informative disclosures are sensibly adequate, and their overall opinions on the supplied financial statements (Power, 1999). The GAAP (
Generally Accepted Auditing Procedures) provide that publicly traded firms should not interfere with auditors’ independence. The firms ought to disclose all their appreciable financial setbacks accurately. They should not overstate own financial performance via inappropriate accounting.
Under the Sarbanes-Oxley Act, the PCAOB (Public Company Accounting Oversight Board) obligates all publicly traded firms to ensure that those auditing them are properly registered with it (Rittenberg, Johnstone & Gramling, 2011). As well, auditing firms and their clients ought to ensure that they are in compliance with the independence, ethical, quality control, and auditing standards set by the board. The COSO (Committee of Sponsoring Organizations of the Treadway Commission) obligates the firms to adopt model of internal control that it developed in assessing their financial control systems. As well, the firms ought to ensure that they are in compliance with the business ethics, financial reporting, organizational governance, enterprise risk management, internal control, and fraud standards set by the committee according to Tysiac (2012).