What Are Auditing Guidelines?
Auditing Guidelines are a suite of documents issued to provide guidance on the proper methods of applying auditing standards. Initially developed by the Auditing Practices Committee (APC) and later adopted by the Auditing Practices Board (APB), these guidelines assist auditors in executing their duties in compliance with established auditing standards. Unlike standards, these guidelines are advisory rather than prescriptive, helping auditors navigate industry-specific issues, operational details, and reporting requirements.
Key Features
- Non-Prescriptive Nature: The guidelines offer direction rather than rigid rules, allowing auditors to apply their professional judgment in various situations.
- Supplementary Role: Designed to complement existing auditing standards by offering detailed methodologies for various auditing tasks.
- Broad Categorization: They are divided into three main categories:
- Industry-Specific Guidelines: Address specialized practices for particular industries.
- Operational Guidelines: Focus on the details of performing audits.
- Reporting Guidelines: Provide direction on how to report audit findings accurately.
Examples of Auditing Guidelines
-
Industry-Specific Guidelines:
- Guidelines tailored for auditing in the banking or insurance industry, helping auditors understand unique risks and compliance requirements.
-
Operational Guidelines:
- Detailed steps for performing inventory audits, ensuring completeness and accuracy in financial statements.
-
Reporting Guidelines:
- Formats and terminologies for audit reports, aiding clarity and comparability in audit communications.
Frequently Asked Questions
Can Auditors Deviate From Auditing Guidelines?
Auditors may depart from the guidelines if a situation warrants it. However, if their failure to follow auditing standards is questioned, they might need to justify why deviation from the guidelines was necessary.
Are Auditing Guidelines Binding?
No, they are not binding. They serve as a framework to assist auditors in best practices but do not have the same authoritative weight as auditing standards.
Who Issues Auditing Guidelines?
Originally, the Auditing Practices Committee (APC) issued these guidelines before the responsibility was transferred to the Auditing Practices Board (APB).
How Are Auditing Guidelines Applied in Practice?
Auditors use these guidelines to enhance their understanding and application of auditing standards, customizing their approach based on the specificities of the engagement and industry.
Related Terms
- Auditing Standards: Established criteria determining the basis of prudent auditing practices.
- Auditing Practices Committee (APC): A former body responsible for issuing initial auditing guidelines.
- Auditing Practices Board (APB): The entity that succeeded APC and adopted its guidelines.
Online Resources
- American Institute of CPAs (AICPA)
- International Federation of Accountants (IFAC)
- Financial Reporting Council (FRC)
Suggested Books for Further Study
- Auditing For Dummies by Maire Loughran
- Principles of External Auditing by Brenda Porter, Jon Simon, and David Hatherly
- The Internal Auditing Handbook by K. H. Spencer Pickett
- Auditing and Assurance Services: An Integrated Approach by Alvin A. Arens, Randal J. Elder, and Mark S. Beasley
Accounting Basics: Auditing Guidelines Fundamentals Quiz
Thank you for exploring the foundational aspects of auditing guidelines and testing your knowledge with our quizzes. Continue to dive deeper into the auditing field and perfect your auditing skills!
