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Approaches to auditing standards and their possible impact on auditor behavior

Approaches to auditing standards and their possible impact on auditor behavior The development and existence of appropriate, high quality auditing standards is the first step in the road to quality audits. Auditing standards serve several important purposes including defining what an audit is, promoting consistency, facilitating education, providing a means to judge performance, and, most of all, influencing auditor behavior. Standards also affect many of the other factors that impact auditor behavior such as inspections, enforcement and firm methodologies. Effective audit standards take account of the complex environment that influences auditor behavior and are designed to promote the sound exercise of professional judgment. However, standard setters take different approaches to the development of standards and significant issues related to the role of judgment and to the level of prescription in the auditing standards remain. Audit standard setters have different views of the interplay between the role of standards and how they influence auditor behavior, and this influences the emphasis of the standards themselves. This article discusses the role of audit standards, various approaches used by current standard setters, the advantages and disadvantages of different approaches, and how such approaches may impact audit quality over time. The insights provided are based on professional experience and participation in the standard-setting process. Those involved in activities related to financial reporting, auditing and standard-setting will be interested in reading this article. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Disclosure and Governance Springer Journals

Approaches to auditing standards and their possible impact on auditor behavior

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Publisher
Springer Journals
Copyright
Copyright © 2010 by Palgrave Macmillan, a division of Macmillan Publishers Ltd
Subject
Business and Management; Business and Management, general; Accounting/Auditing; Corporate Finance; Corporate Governance
ISSN
1741-3591
eISSN
1746-6539
DOI
10.1057/jdg.2010.21
Publisher site
See Article on Publisher Site

Abstract

The development and existence of appropriate, high quality auditing standards is the first step in the road to quality audits. Auditing standards serve several important purposes including defining what an audit is, promoting consistency, facilitating education, providing a means to judge performance, and, most of all, influencing auditor behavior. Standards also affect many of the other factors that impact auditor behavior such as inspections, enforcement and firm methodologies. Effective audit standards take account of the complex environment that influences auditor behavior and are designed to promote the sound exercise of professional judgment. However, standard setters take different approaches to the development of standards and significant issues related to the role of judgment and to the level of prescription in the auditing standards remain. Audit standard setters have different views of the interplay between the role of standards and how they influence auditor behavior, and this influences the emphasis of the standards themselves. This article discusses the role of audit standards, various approaches used by current standard setters, the advantages and disadvantages of different approaches, and how such approaches may impact audit quality over time. The insights provided are based on professional experience and participation in the standard-setting process. Those involved in activities related to financial reporting, auditing and standard-setting will be interested in reading this article.

Journal

International Journal of Disclosure and Governance – Springer Journals

Published: Sep 16, 2010

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