Issues in Auditing, Context and Environment - Lecture 11 Flashcards
What contextual and environmental factors have allowed audit issues to reoccur (Chandler and Edwards 1996)?
.Litigation
.Achieving professional status
.Professional versus individual judgement
What are the main reoccurring issues in auditing?
.The role and scope of the audit
.Auditor independence
.The audit report
.Competition between auditors
.The level of litigation against auditors
.Audit regulation
.Lack of skills
What are the 4 main points in Thompson 2018, ‘Contemporary challenges in audit’?
- The focus on audit quality
- Evolving skills requirements for auditors due to changing technologies
- The effect on audit on the emergence of narrative reporting
- Audit standards
How does Thompson (2018) argue why auditors need to be more innovative to be fit for purpose?
.Evolve to stay relevant
.Way forward is to be innovative
.What are currently in place
How does Thompson (2018) suggest overcoming the challenge of audit quality?
.Accountability
.Regulation
.Evolution of the audit process
.Innovate to be relevant
.More refined and coherent set of ethical guidance
How does Thompson (2018) suggest overcoming the challenges of changing technologies?
.Perform complex data analytics
.Wider skill sets
.Recruitment and retention of audit staff
.Continuous and perpetual checks
.Regulation
How does Thompson (2018) suggest overcoming the challenges of narrative reporting?
.Audit other aspects and not only financial
.Greater focus on overall value creation, not just on profitability
.New skill sets to audit emerging performance criteria
How does Thompson (2018) suggest overcoming challenges presented by audit standards?
.ISA 701 guidance on new extended audit report and increased transparency
.Longer audit report to add value and address wider group of stakeholders
.Change role of auditor as independent examiner post year end
