EFFECT OF FOREIGN ACCOUNTING STANDARDS

Effect of Foreign Accounting Standards

Effect of Foreign Accounting Standards

What affect will foreign accounting standards have on your audit engagement from a resource, time and cost standpoint?

The ordinary locate of accounting ethics, principles and dealings that companies use to accumulate their financial statements. Chinese and Generally Accepted Accounting Principles (GAAP) are a mixture of dependable values (put by policy boards) and basically the usually traditional conduct of recording and reporting accounting information. While you have something to do with the financial reporting of a company or government being, you should recognize the principles of Chinese and GAAP. Chinese and Generally accepted accounting principles (GAAP) are implemented through measurement principles and revelation principles. Measurement principles recognize and decide the timing and basis of items that enter the accounting cycle and impact the financial statements, such as the period in which transactions will be recorded (Sharpe, 2009). Disclosure principles determine what exact numbers and other information are essential to be presented in financial statements.

How will foreign standards affect your audit plan and sampling techniques used to validate original transactions?

Almost all professions have a standard code of conduct which consists of standard guidelines that the professional needs to follow while rendering his or her services. The Generally Accepted Auditing Standards (GAAS), Chinese and GAAP are also a pre-defined set of standards by which all the certified public accountants must abide by. These standards determine the quality and the efficiency of the audits done by the accountants, be it of a firm or a government entity (Institute of Chartered Accountants in England and Wales, 1998). The generally accepted auditing standards are also followed when it comes to making a judgment on the work done by an auditor.

The General Standards

In order to perform an audit, the auditor must possess adequate ...