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Audit - Essay Example

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Audit

In the year 2003, IAPC was accepted as a series of restructuring regarding the auditing guidelines in order to further reinforce the setting-standard procedures. The IAASB mainly contributes in delivering auditing process related information clearly to the public as much as possible (International Federation of Accountants, 2011). This paper intends to analyse and critically discuss the development of the wording of the external audit report and the IAASB’s proposals on its further improvement. A Brief Perception on the Purpose of the External Audit Report An external audit report is considered as an assessment concerning the business operation, internal control, governance and financial reporting of a particular company. This report i.e. external audit report is primarily organized by external auditors belonging to different government agencies and other public accounting organizations. The core objective of preparing an external audit report is to deliver a self-governing evaluation as well as unbiased appraisal regarding a firm’s internal governance (Saint Helena Audit Service, 2006). The ‘International Auditing and Assurance Standards Board (IAASB)’ is typically regarded as an autonomous standard-setting body that provides valuable guidelines about the preparation of an external auditing report. The major purpose of the IAASB is to concentrate on public interest by setting superior quality of international values. Moreover, the guidelines and core values of IAASB focuses upon the improvement of quality and consistency of auditing practices all over the world and also reinforce the public confidence towards international auditing (International Federation of Accountants, 2011). By taking into concern the medium term strategy, the basic objectives of IAASB include the following attributes emphasising upon public interest (International Federation of Accountants, 2011). The attributes are as follows: Controlling effective stability regarding international financial aspects, Improving the importance as well as role and providing quality assurance towards the auditing services within the context of today’s financial condition and Initialising clarity as well as successful execution of auditing standards (International Federation of Accountants, 2011). A Brief Explanation about How and Why the Wording has Evolved in the External Audit Report Since the year 1980, when the auditing standards are required to be maintained effectively within the external auditing report, it has been identified that the stakeholders face several issues about the pronunciation and the wordings content in the report. Due to these several problems, the auditing report has undergone several changes in order to improve both its quality as well as clarity that would be helpful for the auditors to fulfil the expectation of the stakeholders. In the year 1994, David Woodliff, Professor of finance and accounting, conducted a research study regarding the audit expectation gap. The primary reason of the study is to identify the dissimilarities between the users of financial report and the message of the auditors ...Show more

Summary

Audit Table of Contents Introduction 3 A Brief Perception on the Purpose of the External Audit Report 3 A Brief Explanation about How and Why the Wording has Evolved in the External Audit Report 4 A Critical Appraisal of the IAASB’s Proposals, Possible Alternatives and Expected Reaction from Stakeholders 6 A Critical Discussion and Comment on Possible Future Developments In Relation To Audit Reporting 7 8 Conclusion and Recommendations 9 References 10 Bibliography 12 Introduction The ‘International Auditing and Assurance Standard Board (IAASB)’ was formed in the year 1978 and formerly it was known as ‘International Auditing Practices Committee (IAPC)’…
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