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Q: What are the auditing standards for external auditors?

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Auditing Standards - External

External auditors, in private practice, follow the auditing guidelines set forth within GAAS. GAAS stands for Generally Accepted Auditing Standards. They also must know, understand, and follow GAAP (Generally Accepted Accounting Principles) to ascertain management’s compliance.

External auditors in public practice (governmental) adhere to GAGAS (Generally Accepted Governmental Auditing Standards).

Financial accounting follows GAAP - Generally Accepted Accounting Principles. External auditors need to ascertain compliance with GAAP for management transactions. Compliance with Sarbanes-Oxley Act (SOX) must also be audited. This is defined through PCAOB, which reports to the SEC.

External auditing standards also must comply with legal regulations.

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