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They are the standards by which the audit itself should be conducted. The Standards of Reporting require the auditor to include in their report a statement that the entity's financials follow GAAP, any inconsistencies of principles, inadequate disclosures, and an opinion of the statements or reason why opinion cannot be stated...
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They help to maintain a consistency of reporting as well as improve communication of the auditing reports. The financial audit involves obtaining and evaluating evidence about an entity's presentation of its financial position, results of operations, and cash flows. A compliance audit involves obtaining and evaluating evidence to determine whether certain financial or operating activities of an entity conform to specified conditions, rules or regulations...
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