Generally accepted auditing standards or GAAS are the minimum standards certified public accountants (CPAs) must follow when they perform audits. There is an exception in the law for local auditees that, under Louisiana law, cannot issue bonded debt (R.S. The audit law ( Louisiana Revised Statute (R.S.) 24:514) requires the reports of local auditees to be prepared in accordance with GAAP. The Financial Accounting Standards Board or FASB sets GAAP for all non-governmental entities, including nonprofit organizations. The Governmental Accounting Standards Board or GASB sets GAAP for state and local governmental entities. The audit report of a department store should include the same types of information as the audit report of another department store and the audit report of a city should include the same types of information as the audit report of another city.ĭifferent standards setting bodies establish GAAP for different types of entities. Reporting in accordance with GAAP ensures consistency and comparability among like entities. Generally accepted accounting principles or GAAP are the minimum standards and guidelines for financial accounting and reporting. Three of the acronyms that are confusing to CPAs – because they are related in form and in substance – are those for generally accepted accounting principles (GAAP) generally accepted auditing standards (GAAS), and generally accepted government auditing standards (GAGAS). The meaning of these acronyms is not always clear, even to the members of the profession that use them. Local auditees should use the information in the LAGAG, in conjunction with the guidance of the professionals most familiar with the particular facts and circumstances regarding their agency, in the performance of their operations.įor questions and comments about the LAGAG, please contact LLA at (225) 339-3800.Ĭertified public accountants, like other professionals, use a lot of acronyms.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES GAAP PROFESSIONAL
In addition, although the LAGAG is intended to assist local auditees, it does not include all of the legal and accounting information an agency needs to perform its operations nor is it a substitute for professional, legal or accounting advice or professional or personal judgment. CPAs must reach their own conclusions through research of all applicable auditing and accounting standards, in addition to the LAGAG, in the performance of their local auditee engagements. The LAGAG is jointly produced by the Louisiana Legislative Auditor (LLA) and the Society of Louisiana Certified Public Accountants.Īlthough the LAGAG is intended to assist CPAs in performing their audits and other engagements for local auditees, it does not include a detailed analysis of the professional auditing and accounting standards a CPA must consider during his or her audit, review/attestation or compilation engagements nor is it a substitute for professional judgment. (5) (a) (i) to set forth the standards by which the engagements of local governments and quasi-public organizations (local auditees) are to be performed.
The Louisiana Governmental Audit Guide (LAGAG) is authorized by Louisiana Revised Statute 24:513 A.