These categories cover the accepted code of conduct for auditors in each hase of an audit from the general standards to standards of field work and reporting standards. The GAAS apply to each type of audit that occurs in the workplace whether it is a financial, operational, or compliance audit. GAAS affect how a company approaches a financial audit. When analyzing the financial statements one of the important aspects of auditing is the independence of the auditor from the company experiencing an audit.With regard to this required independence many states only allow CPAs to perform financial audits and most companies will rely on external auditors to ensure independence. Operational audits call for recommendations made by the auditor or auditors on the effectiveness of an operation within the company based on the objectives of the operation.

In this role, the efficiency reports given by the auditing body are vital in making recommendations for improvements. This makes it important for the auditors to practice due professional care when performing the audit.Compliance audits, by definition, deal with the company's compliance to rules and regulations, and as such need to be scrutinizing. The Sarbanes-Oxley Act SOX requires public companies to be audited with regard to both the financial statements nd the management's assertion as to whether the reports are in compliance and sufficient internal controls are in place. Both SOX and the PCAOB affect the audits of publicly traded companies because they specifically define procedures that must be taken to ensure compliance with GAAP and GAAS.SOX outlines how an auditing firm must approach the evaluation of internal controls and requires that the effectiveness of internal controls is audited annually.

Prior to SOX the internal controls were generally examined on a cycle rotation rather than annually. The PCAOB has six auditing standards that must be met in an audit with one of hem relating to the correct evaluation of the consistency of the financial statements (Kinyo, 2010). This requires the auditing team to compare financial statements from previous years to evaluate consistency particularly when a different auditor performed the previous audit.Although it can be trustrating to nave so many principles, rules, and regulations to follow, it actually makes the auditors' Job easier because many decisions are made for them. When there is clarity in regulatory principles then consistency will increase because there is no other option.

Appendix A General Standards 1 . The auditor must have adequate technical training and proficiency to perform the audit. 2. The auditor must maintain independence in mental attitude in all matters relating to the audit. 3.

The auditor must exercise due professional care in the performance of the audit and the preparation of the report. Standards of Field Work 1 . The auditor must adequately plan the work and must properly supervise any assistants. 2. The auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material isstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.

3.The auditor must obtain sufficient appropriatel audit evidence by performing audit procedures to afford a reasonable basis for an opinion regarding the financial statements under audit. Standards of Reporting 2 1. The auditor must state in the auditor's report whether the financial statements are presented in accordance with generally accepted accounting principles.

3 2. The auditor must identify in the auditor's report those circumstances hich such principles have not been consistently observed in the current in period in relation to the preceding period. . When the auditor determines that informative disclosures are not reasonably adequate, the auditor must so state in the auditor's report.

4. The auditor must either express an opinion regarding the financial statements, taken as a whole, or state that an opinion cannot be expressed, in the auditor's report. When the auditor cannot express an overall opinion, the auditor should state the reasons therefore in the auditor's report.