Challenges in Auditing - Literature review Example

According to Power (1997, cited in Free, Salterio and Shearer, 2009) auditing can be described as both operational and programmatic elements. The programmatic elements relate to the concepts and ideas that make practice and policy objectives that are existent in the political arena. Goals are formulated with the practices for the levels of programs. These levels are defined when audits are required by the regulatory agencies. The operational elements refer to the concrete routines and tasks that are practiced by the practitioners worldwide.

Review The global audit regulatory system is dynamic that includes a number of organizations, which compete among them. Such competition is reflected in the range of actions from political lobbying process to policy publication papers and submission of those papers to the committees. During the period of financial crisis, it is hard to find papers that are audited by the large firms, national audit boards and the professional bodies. Another problem related to the financial crisis is that, the process in which the assurance operation is carried out and enacted (Kornberger, Justesen and Mouritsen, 2011).

Audits aims at drawing general conclusion from the studies that are made regarding a topic. Thus, there is lack of potential use of the statistical foundations like sampling, which often gave limited information and provided with incorrect results. The qualitative studies carried out by Humphrey and Moizer (1990, cited in Kornberger, Justesen and Mouritsen, 2011) and Fischer (1996, cited in Kornberger, Justesen and Mouritsen, 2011) has suggested that the practice of the financial audit work is socially constructed.

Curtis and Turley (2007, cited in Kornberger, Justesen and Mouritsen, 2011) has argued that there are huge business risk in the audit works. They have documented the problems that are related to the translation of new concepts that are developed by the officers at administrative levels, into the real audit techniques at the general practitioner level. The auditing profession is related to good consequences as well as bad crisis. But the auditing profession has responded boldly to the financial crisis by implementing a number of communication modes and interacting with the governmental and regulatory bodies.

The clarification is needed for specifying the exact role and the obligations of the auditors. According to Woods (2009, cited in Kornberger, Justesen and Mouritsen, 2011) the companies often face downturn, when their financial statements are not audited properly and thus it threats the future developments of the company. According to Cherry, Johnson and Veron (2008, cited in Humphrey, Loft and Woods, 2009) suggested that auditing practices can overshadow the standard of financial reporting. Thus, greater focus is to be provided to the volatility of the accounting numbers than to audibility of the traditional financial statements.

The imbalance between the two is noticed during the fair value debate. It has been suggested by Ryan (2008, cited in Humphrey, Loft and Woods, 2009) that the duration of the crisis can be reduced, if the practitioner of the auditing functions are exercising the Financial accounting System appropriately. The auditors seek to develop a firm ability to make a judgment related to the reporting of the fair values. Ryan (2008, cited