The requirement for internal quality control and external peer review is a characteristic of which auditing framework?

The requirement for internal quality control and external peer review is a characteristic of which auditing framework?

• A. GAAP
• B. GAGAS
• C. IFRS
• D. COSO

Answer: (B)

GAGAS emphasizes quality in government auditing, including a strong focus on internal quality control and an external peer review process. Internal quality control means the audit organization has deliberate policies and procedures to ensure audits are planned, executed, and reported in accordance with professional standards. External peer review provides an independent evaluation of the organization’s quality control system by a qualified reviewer, and it is typically conducted on a regular cycle to verify ongoing compliance with GAGAS. This combination helps ensure audits are performed with competence, objectivity, and reliability in the public sector. GAAP and IFRS are accounting standards for preparing financial statements, not auditing frameworks with mandatory internal quality controls and peer reviews. COSO offers a framework for designing and assessing internal control but is not the government auditing framework that requires external peer reviews.

GAGAS emphasizes quality in government auditing, including a strong focus on internal quality control and an external peer review process. Internal quality control means the audit organization has deliberate policies and procedures to ensure audits are planned, executed, and reported in accordance with professional standards. External peer review provides an independent evaluation of the organization’s quality control system by a qualified reviewer, and it is typically conducted on a regular cycle to verify ongoing compliance with GAGAS. This combination helps ensure audits are performed with competence, objectivity, and reliability in the public sector.

GAAP and IFRS are accounting standards for preparing financial statements, not auditing frameworks with mandatory internal quality controls and peer reviews. COSO offers a framework for designing and assessing internal control but is not the government auditing framework that requires external peer reviews.