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Posted on March 27th, 2013, by

With the development of transnational corporations, integration and transformation of accounting firms to large international groups appeared a need to harmonize auditing globally. Problems in the audit are almost identical worldwide, so the professional organizations of any country when solving specific problem primarily study variant of its solutions in other organizations.

In its essence audit is verification, revision. Currently, an audit is a separate sphere of business of professional auditors to implement independent audits of financial statements. Auditors may also provide additional services related to advising on accounting and tax legislation. The role of auditing lies in ensuring the reliability of financial reporting due to their independence from the subject of inspection, the opportunity to obtain an independent and, hence, more objective view of the financial statements in the audited enterprises. The factor of independence is extremely important, because it allows to provide an impartial and unbiased opinion of auditors on the state of financial reporting of the client. This confirms that the International Standards on Auditing precede the Code of Ethics for Professional Accountants, in which independence is regarded as one of the most important factors determining the activity of public practice as a professional accountant.

The aim of this paper is to:
1) describe general information about auditing and international audits;
2) consider the International Auditing Standards
3) identify the relationship of international auditing standards with quality assurance of audit activities.

International standards and norms in auditing
With the development of the market and the integration processes in the economy of various countries and the transformation of individual audit firms to large international groups appeared a need to harmonize auditing globally.

In modern market conditions enterprises, credit institutions, other economic objects enter into contractual relations on the use of property, funds, conducting commercial transactions and investments. The credibility of these relations must be accompanied by an opportunity for all participants to obtain and use financial information. Reliability of the information must be confirmed by an independent auditor. Owners and, above all, the collective owners (shareholders and creditors) are unable to independently verify that all operations of the enterprise, which are often very complicated, are legally and properly reflected in the accounts, as usually they have no access to the accounts or don’t have relevant experience, and therefore need the services of auditors. Independent confirmation of the results of activities of enterprises and their compliance with the legislation is necessary to state decision-making in the field of economics and taxation. (Roussey 2011)

Audit services are services of intermediaries, establishing the reliability of financial information.
Audits are important for state agencies, courts, prosecutors and investigators to validate the interest of their financial statements. The need for the services of an auditor has arisen in connection with the following circumstances:
– The possibility of biased information received from the administration, in cases of conflict between it and the users of this information (owners, investors, creditors);
– Dependence of the consequences of decisions (they can be quite large) on the quality of information;
– The need for specialized knowledge to verify the information;
– The frequent lack of information users access to assess its quality.
All these conditions have resulted in public demand for the services of independent experts with appropriate training, qualifications, experience and a license to provide such services.
For quality and success of the audit services it is necessary to use the uniform rules (standards) for audit. Rules (standards) of audit is general guidance to the rules and regulations that help auditors fulfill their responsibilities for conducting audits and regulatory principles and features of audit activity. (Bode S, 2007)
In auditing standards are described in details all the requirements that need to perform the audit, how to plan the work with the customer’s business properly, learn accounting systems and internal controls, how to collect and evaluate audit evidence, conduct spot checks, to make audit reports. Implementation of standards is a guarantee of quality audit services. (Roussey 2011)
Development, implementation and promotion of these standards is made by the International Federation of Accountants (IFAC), which is an international association of accountants. IFAC and major international companies launched a new initiative aimed at improving the quality of financial reporting standards and auditing standards worldwide, which would protect the interests of international investors and facilitate movement of capital movement between countries. (Roussey 2011)

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