Certified Government Auditing Professional (CGAP) Practice Exam

The AICPA's GAAS primarily pertains to which type of audits?

1. Performance audits.

2. Consulting services.

3. Assistance to oversight bodies.

4. Financial statement audits.

The correct answer is: Financial statement audits.

The correct choice pertains to financial statement audits because the American Institute of Certified Public Accountants (AICPA) has established Generally Accepted Auditing Standards (GAAS) specifically to guide auditors in conducting these audits. GAAS provides a framework aimed at ensuring the accuracy and reliability of financial reporting, maintaining public trust, and promoting consistency in audit practices. Within these standards, GAAS outlines principles that auditors should follow in order to achieve a high-quality audit. This includes planning the audit, obtaining sufficient evidence, performing appropriate procedures, and ensuring the audit is conducted in accordance with established standards. The focus on financial statements stems from the need for stakeholders, including investors, creditors, and regulatory bodies, to rely on the integrity of the financial data presented by organizations. In contrast, performance audits, consulting services, and assistance to oversight bodies are governed by different sets of standards and principles that cater to their unique objectives and methodologies. For example, performance audits evaluate the efficiency and effectiveness of operations rather than the accuracy of financial statements. Thus, GAAS is primarily relevant to financial statement audits, which distinguishes it from the other types of services mentioned.