Auditing standards

This report was prepared by a team from the World Bank on the basis of the findings from a diagnostic review carried out in Morocco in May 2002. The staff team comprised M. Zubaidur Rahman and Frédéric Gielen (OPCFM), and Meryem Benchemsi (MNACS). The review was conducted through a participatory process involving various stakeholders and led by the country authorities.

This report was prepared by M. Zubaidur Rahman (OPCFM) and Rajeev K. Swami (LCOAA) of the World Bank on the basis of the findings from a diagnostic review carried out in Jamaica in December 2002 and June 2003 in collaboration with the Inter-American Development Bank. This report contains self-assessments prepared by the Institute of Chartered Accountants of Jamaica with the assistance of an international consultant.

Purpose -This study aims to examine the International Standards on Auditing (ISA) number 520 relating to analytical procedures (APs) and adapt relevant aspects of prior studies on APs to the Egyptian audit context. The study investigates the extent of use of APs in Egypt during the three main stages of an audit by size of firms and level of staff. It examines auditors' perceptions of the frequency and effectiveness of different types of APs in achieving a selected set of audit objectives. The study also identifies the types of assurance provided by APs and their influence on detailed testing as well as analyzing the role of auditing standards in the context of the use of APs. Design/methodology/approach -The design and research method are empirical using a questionnaire survey to collect information on actual uses of APs from 14 audit firms in Egypt which audit the 100 actively traded companies on the Egyptian Stock Exchange (EGX) as measured by the EGX 100 index. The survey was carried out between 2008 and 2009. Findings -The results of the study showed relatively low use of APs by Egyptian auditors with wide variations in its use by Big 4 and other auditing firms. Auditors from Big 4 firms are found to use APs to a greater extent than auditors from non-Big 4 firms. Also, the reliance on APs tends to differ by auditors rank and position. The majority of auditors consider APs useful in achieving audit objectives. Audit firms of all size continue to emphasize judgment-based compared to quantitatively based procedures. The results also indicated a lack of confidence in the use of APs as substantive procedures. Finally, the study confirmed prior research findings in that auditing standards are regarded as most effective in codifying existing large firms practice. It was found that ISA 520 has been least effective in stimulating change in the Egyptian audit practice.

SUMMARY: This study investigates the role of business risk perspectives in the audit of smaller and medium-sized entities (SMEs) by small and medium-sized audit practices (SMPs). The research is important, since we have little knowledge of how SMPs utilize business risk factors, and there is a current debate about the need for proportionally applying auditing standards, including standards on business risks, in the audit of SMEs. We conduct 38 interviews with Dutch and German auditors of both small and medium-sized audit practices to capture a variety of different audit environments. We develop a model that considers a continuum of audit approaches ranging from a substantive-based audit approach to a full-scope business risk audit, and observe a limited and heterogeneous application of business risk perspectives by SMP auditors. We find that client complexity, enforcement by audit supervisory authorities, relative emphasis on book-tax alignment in different countries, and investment...

Auditor merupakan profesi kepercayaan klien untuk membuktikan kewajaran laporan keuangan yang disajikan oleh manajemen perusahaan. Untuk dapat mempertahankan kepercayaan dari klien dan dari para pemakai laporan keuangan auditan lainnya maka auditor dituntut menjadi seorang ahli. Dalam mendeteksi kecurangan auditor harus memepunyai kemampuan yang tinggi dan mengetahui aspek-aspek kecurangan yang dapat terjadi dalam auditnya. Untuk itu auditor perlu mengerti dan memahami kecurangan, jenis kecurangan, faktor terjadinya kecurangan, serta cara untuk mendeteksinya. Namun dengan beragamnya industri yang ada seperti manufaktur, jasa, pertambangan, perkebunan, dan lain sebagainya tidak mungkin untuuk dikuasai semua oleh seorang auditor.

According to Nick Stern, while the World Bank's long-term strategy is not changing as a consequence of S,eptember 11, certain adjustments are taking place. The Bank will apply a more inclusive approach to ensure that developing and transition countries share the benefits of globalization more equitably, and recognizing that no "one size fits all" solution is available, the Bank will increasingly encourage countries to choose their own approach to development.

This report provides an assessment of Moroccan accounting and auditing standards and practices, and the institutional capacity necessary to ensure high-quality financial reporting. The law gives accounting standard-setting responsibility to the National Accounting Council (Conseil National de la Comptabilite). Since the Council was established in 1989, Moroccan accounting standards have improved greatly. However, further progress is impeded by weaknesses in the accounting standard-setting process and, more so, by implementation issues. The Bank Al-Maghrib, Insurance and Social Welfare Directorate (Direction des Assurances et de la Prevoyance Sociales), and Securities Commission (Conseil Deontologique des Valeurs Mobilieres) are responsible for monitoring the quality of financial information and the enforcement of accounting standards for credit institutions, insurance companies, and listed companies, respectively. While the Bank Al-Maghrib has established an institutional framework ...

SUMMARY We organized a panel discussion on the roles of the multiple auditing standard setters and the implications of these multiple sets of standards for practice and education. The session took place at the American Accounting Association (AAA) Auditing Section Meeting in Savannah, Georgia in January 2012. In this paper, we discuss the roles of the various auditing standards setters (e.g., Auditing Standards Board [ASB], Public Company Accounting Oversight Board [PCAOB], International Auditing and Assurance Standards Board [IAASB]) and how the standards have diverged over time. We then present panelists' responses to questions raised during the session, which reflect differing perspectives concerning why multiple standards may be necessary, barriers to a more unified structure for auditing standards, and differences in enforcement and quality assessment. The panelists also discussed challenges posed by the existence of multiple standards for CPA firms, students, and instructo...

During the past decade, Egypt made significant efforts to align corporate financial reporting requirements with the International Accounting Standards (IAS) and to close the compliance gap in both accounting and auditing practices. Consequently, important improvements have been achieved in accounting and disclosure requirements for the publicly traded companies and financial institutions and in Egyptian Accounting Standards as benchmarked against IAS. Moreover, a new Accounting Practice Law has been drafted and agreed upon by all stakeholders, though not yet been ratified. Further improvements could be achieved by issuing a modern legislative framework that includes an appropriate regulatory framework for practicing auditors, addressing weaknesses in professional education and training arrangements, introducing qualification examinations for auditor licensing, and developing an enforcement mechanism to ensure compliance with applicable accounting and auditing standards.

Auditors are required to issue going concern opinion (GC opinion) to companies that are incapable to continue their operations in the near future. It is very important for auditors to issue the GC opinion properly because such opinion is the only signal from them on the viability of a company. Investors need such signal before they can make good
investment decisions. In Malaysia however, auditors do not want to issue GC opinion to a very large percentage of financially distressed companies. This motivates this paper to discuss the impact of the latest ISA 570 (2016) on GC opinion issuance rate in this country. Overall, we are in the opinion that there is no strong ground to expect the new ISA 570 (2016) to reduce the problem of Malaysian auditors do not issue the GC opinion to many financially distressed companies. This is due to no new stricter measures being introduced in the latest auditing standard. Nonetheless, we propose four actions that can be taken by Malaysian policy makers and standard setters if they want to improve the rate and practice of GC opinion issuance.

For centuries, internal audit was a simple administrative procedure of checking documents, counting assets, and reporting on past events to various types of management. Several forces in our times have led to a quiet revolution in internal audit. Democracy requires government to be accountable in its use of public money and in providing effective, efficient, and economical service delivery. Ever larger and more complex systems require greater competencies, thus internal audit has had to become ever more professional. Sheer size also brings with it the need to assess risk, deploying scarce resources in the most logical manner to address those risks. Technological advances have made it possible to track and analyse more data much faster. An informed world that keeps turning ever faster, makes it essential for governments to be well informed by internal audit about the risks and improvements in public finance management and service delivery.

Purpose-The purpose of this paper is to examine and evaluate the internationalisation of Australian auditing standards by analysing the submissions to the Auditing and Assurance Standards Board's (AUASB) strategic directions paper (SDP) and comparing the proposed and approved strategic directions frameworks of the AUASB. Design/methodology/approach-A content analysis of the submissions to the SDP is conducted to identify the extent of support, and arguments for and against the proposed strategic directions. This study attempts to find a link, if any, between the proposed strategic directions, the views expressed by the stakeholders, and the final set of strategic directions issued by Australia's Financial Reporting Council. Findings-Overall, the final set of strategic directions released in April 2005 are consistent with the views expressed in the submissions, which support minimal divergence from International Standards on Auditing (ISAs) and using the ISAs as the base for developing Australian auditing standards. Major changes from the SDP include a requirement for the AUASB to undertake research and monitor auditing standards issued by national standard setters. However, the AUASB is no longer obliged to contribute to the international standard arena and need only have regard to any program initiated by the International Auditing and Assurance Standards Board. Research limitations/implications-The findings of this study provide an insight into the future of Australia's role in the international arena and increase awareness of stakeholders' views on the international harmonisation of auditing standards. Originality/value-While there have been several studies examining the international harmonisation of accounting standards, there is comparatively little research on the international harmonisation of auditing standards. This paper attempts to address this void, in part, and contribute to the literature on the convergence of auditing standards with ISAs.

Government increasingly leverages its regulatory function by embodying in law standards that are promulgated and copyrighted by non-governmental organizations. Departures from such standards expose citizens to criminal, civil and administrative sanctions, yet private actors generate, control and limit access to them. Despite governmental ambitions, no one is responsible for evaluating the legitimacy of this approach and no framework exists to facilitate analysis. This Article contributes an analytical framework and, for the federal government, nominates the Director of the Federal Register to implement it. Analysis is animated using among the oldest and broadest examples of this pervasive but stealthy phenomenon: embodiment by Congress and the Securities and Exchange Commission of privately-promulgated accounting standards in public law. With accounting standards as a case study, the framework delineates three routes through which private standards are embodied in public law - denom...

This study investigates voluntary demand for auditing by Australian farm businesses, a significant but relatively unexplored segment of the economy. Most farms operate as family partnerships or sole proprietors and we thus focus on incentives to audit arising from internal sources (owner-manager), controlling for traditional incentives arising from external contractual constraints (i.e., debt), organisational characteristics (i.e., size), and agency conflict. We hypothesise that an external audit assists management in enhancing internal control by complementing the process of profit planning and control (budgeting) and that increased family conflict provides an incentive to engage external audit. Of the 457 survey questionnaire respondents, 27% voluntarily engage an external auditor and 66% conduct some formal written planning. Results from logistic regression analyses support the predicted impact of both size and debt on audit, and further support the hypothesised impact of budgeting. The positive association between budgeting and audit confirms the complementary relationship. More importantly, this relationship is not confounded by the combined impact of size and budgeting and debt and budgeting on voluntary audit. In addition, family conflict has no impact on voluntary demand for auditing by farm business.

According to Nick Stern, while the World Bank's long-term strategy is not changing as a consequence of S,eptember 11, certain adjustments are taking place. The Bank will apply a more inclusive approach to ensure that developing and transition countries share the benefits of globalization more equitably, and recognizing that no "one size fits all" solution is available, the Bank will increasingly encourage countries to choose their own approach to development.

Financial crises in the international markets, which have global effects, have increased the importance of internal auditing especially in the banking sector in recent years. Minimizing the negative effects of crises is closely related to the establishment and functioning of an effective internal control system. International internal audit standards (IIAS) issued by the International Internal Audit Standards Boards are internationally applicable standards that contain the basic requirements for the professional implementation and evaluation of the effectiveness of internal auditing. In developing countries where the effects of crises are intensely felt, public banks are one of the most important actors of the financial system. An effective internal control structure in public banks and in compliance with international standards is necessary for a strong and fragile financial system. The purpose of this study is to examine the internal audit activities in public banks in terms of co...

Financial crises in the international markets, which have global effects, have increased the importance of internal auditing especially in the banking sector in recent years. Minimizing the negative effects of crises is closely related to the establishment and functioning of an effective internal control system. International internal audit standards (IIAS) issued by the International Internal Audit Standards Boards are internationally applicable standards that contain the basic requirements for the professional implementation and evaluation of the effectiveness of internal auditing. In developing countries where the effects of crises are intensely felt, public banks are one of the most important actors of the financial system. An effective internal control structure in public banks and in compliance with international standards is necessary for a strong and fragile financial system. The purpose of this study is to examine the internal audit activities in public banks in terms of co...

This empirical-analytical study aims to provide a comparison between the levels of audit activity regulation in banking institutions and evaluate the relationship between the degree of regulation and the characteristics of national banking systems. To this end, a database containing data from a survey conducted with the national banking supervisory and regulatory authorities of 172 countries that is maintained by the World Bank was used. Descriptive statistics revealed that the highest levels of regulation are recorded in the most developed nations as well as Middle Eastern, North African, European and Central Asian countries. The study also confirmed that Brazil has a higher level of regulation than the international average. Tests were carried out using regressions to evaluate the relationship between the level of auditing regulations and the characteristics of banking sectors; it was evident that countries with higher levels of domestic credit provision by the banking sector and more profitable banks impose more requirements regarding the performance of auditors. In contrast, there is less regulation in countries where state banks participate more in the financial system and where there are more restrictions on the activities of banking institutions. A positive association between a banking sector's degree of concentration and the level of auditing regulation was not found. Finally, it was noted that, in 2000, the first year in which the employed survey was conducted, the level of regulation was lower than in the other years, whereas in 2007, the final year of the survey, the level of regulation was higher than in previous years. These results confirm the findings in the literature that auditing standards are likely to become more stringent over time as the demand for more rigorous requirements accumulates, especially during credibility crises.

Este estudo empírico-analítico tem por objetivos promover uma comparação dos níveis de regulação da atividade de auditoria em instituições bancárias e avaliar a relação entre esse grau de regulação e características dos sistemas bancários nacionais. Utilizou-se uma base de dados mantida pelo Banco Mundial, contendo pesquisa realizada junto a autoridades supervisoras e regulatórias bancárias nacionais de 172 países. Por meio de estatísticas descritivas, foi constatado que o nível mais elevado de regulação é registrado nas nações mais desenvolvidas e nos países do Oriente Médio, Norte da África, Europa e Ásia Central. Também foi constatado que o Brasil apresenta grau de regulação superior à média verificada internacionalmente. Quanto aos testes realizados, por meio de regressão, para avaliar a relação entre o nível de regulação de auditoria e características do setor bancário, foi evidenciado que há mais requerimentos para a atuação dos auditores nos países em que o crédito doméstico ...

Financial crises in the international markets, which have global effects, have increased the importance of internal auditing especially in the banking sector in recent years. Minimizing the negative effects of crises is closely related to the establishment and functioning of an effective internal control system. International internal audit standards (IIAS) issued by the International Internal Audit Standards Boards are internationally applicable standards that contain the basic requirements for the professional implementation and evaluation of the effectiveness of internal auditing. In developing countries where the effects of crises are intensely felt, public banks are one of the most important actors of the financial system. An effective internal control structure in public banks and in compliance with international standards is necessary for a strong and fragile financial system. The purpose of this study is to examine the internal audit activities in public banks in terms of compliance with international standards. In this study conducted at one of the leading state-owned bank in Turkey, the bank’s internal control procedures and internal control activities reports were examined. In addition, the Bank’s internal audit activities were analyzed by conducting interviews with bank officials for a better understanding of the internal control system. The IIAS, which are grouped under two main headings, are related to the internal audit activities of the related bank It is thought that the study will guide banks and auditors in terms of demonstrating the application of IIAS, which usually consist of abstract statements.

According to Nick Stern, while the World Bank's long-term strategy is not changing as a consequence of S,eptember 11, certain adjustments are taking place. The Bank will apply a more inclusive approach to ensure that developing and transition countries share the benefits of globalization more equitably, and recognizing that no "one size fits all" solution is available, the Bank will increasingly encourage countries to choose their own approach to development. Q: Many scholars have argued that rector Paul Collier clearly points in this same time, Wolf notes, 99 percent the September 11 terrorist attacks direction. Thus some connections be-of the 3 billion growth in world popuand the frustration of the impover-tween poverty and the attacks are ap-lation foreseen in the next 50 years ished Muslim masses are connected. parent, but we should avoid simplistic is expected to be in the developing Do you see such a connection? explanations. world. He also predicts that more fragile countries will continue to A: First, let us be clear about one point: Q: Still, as Martin Wolf wrote re-stagnate; that there is a possibility no sense of injustice can ever justify cently in the Financial Times, the of wars over resources, particularly what happened in the United States on terrorist attack of September 11 water; and that nuclear weapons September 11. In analyzing the connec-killed the post-Cold War delusion of may proliferate, some perhaps falltion between poverty and terrorism, effortless international harmony. He ing into terrorist hands. As he puts there is great temptation to simplify, highlights the income gap between it, "The position enjoyed by the rich Most of the terrorists involved in this poor and rich. The high-income countries may be more fragile and crime appear to have come from rich countries, with a combined popula-less easy to defend than many have, families, from relatively well-to-do coun-tion of 900 million, have an average until recently, assumed." Have we tries. At the same time, we have to per capita annual income of $26,000 entered a period of escalating constudy and understand the role of failed and are generating four-fifths of the frontation between rich and poor statesthatoftenprovideorcondonesafe world's gross national income at countries, and will this require a havens for organized terrorism. These market prices. In the developing change in the World Bank's longsafe havens are frequently outside gov-world, 5.1 billion people have an term strategy? ernments' control, and they are often average annual per capita income afflicted by conflicts, mostly internal of $3,500. Half of them, about 2.4 A: The fallout of September 11 is proconflicts that are, at least in part, pro-billion people, live in low-income found. However, we also have to convoked by poverty. Recent research on countries with average annual per sider the pre-September 11 situation conflict and violence by Research Di-capita incomes of $1,900. At the more realistically. From 1980 to 2000

For centuries, internal audit was a simple administrative procedure of checking documents, counting assets, and reporting on past events to various types of management. Several forces in our times have led to a quiet revolution in internal audit. Democracy requires government to be accountable in its use of public money and in providing effective, efficient, and economical service delivery. Ever larger and more complex systems require greater competencies, thus internal audit has had to become ever more professional. Sheer size also brings with it the need to assess risk, deploying scarce resources in the most logical manner to address those risks. Technological advances have made it possible to track and analyse more data much faster. An informed world that keeps turning ever faster, makes it essential for governments to be well informed by internal audit about the risks and improvements in public finance management and service delivery.

PurposeThe purpose of this paper is to determine if there is a level of agreement among accounting academics, auditors, and forensic accountants that the current environmental framework created by regulatory and standard setting bodies appears to require a merger of common ground between forensic accounting and auditing.Design/methodology/approachA survey in the USA is conducted for a random sample of accounting academics, forensic accounting practitioners, and auditors questioning if the addition of forensic accounting proficiency should be part of an auditor's skill set to increase the probability of detecting fraud.FindingsThe results indicate that forensic accounting has a place in the audit process and that auditors may need to add some of these skills as the market for audits have changed.Research limitations/implicationsThe limitation of the current paper which is inherent to survey research is non‐response bias. The only way to evaluate this is to test late responses and...

Reports on the Observance of Standards and Codes (ROSC) Accounting and Auditing (A&A) assess accounting and auditing practices in participating countries. They form part of a World Bank and International Monetary Fund joint initiative to review the quality of implementation of twelve internationally recognized core standards relevant to economic stability and private and financial sector development (the ROSC Program). Since its inception in 2000, the ROSC A&A program has concluded evaluations of the A&A environment in more than one hundred countries around the world. ROSC A&A reports have been produced for all countries of the Europe and Central Asia Region, except Russia. This report covers the accounting, audit, and financial reporting frameworks as a whole, paying particular attention to the financial sector, state owned enterprises, SMEs and audit regulation - key areas that are important in the current economic context of Georgia. With respect to SOEs, the report focuses on th...

Design/methodology/approach – The adoption of IAS in Malaysia in 2006 introduced a highly technical standard (financial reporting standards – FRS 136) which impacted not only preparers but also auditors of financial statements. This transition period represents a unique ...

Este traballo ten como obxectivo analizar se os informes de auditoría de contas anuais se redactan de acordo coas Normas Técnicas de Auditoría (NTA) sobre informes, para o cal se estuda se o formato e o contido dos informes é acorde á normativa española vixente, e a súa relación co tipo de opinión que contén e co auditor que o emite. Partimos dunha mostra de 1.236 informes de empresas galegas non cotizadas seleccionadas mediante o método de mostraxe aleatoria estratificada para o período 2004-2007. Unha vez definidas a variable dependente -a cualificación global asignada a un informe segundo o grao de cumprimento das NTA-e as variables independentes -o tipo de auditor e o tipo de opinión-, contrástanse as hipóteses mediante unha análise de regresión coa finalidade de explicar os cambios na probabilidade de atopar un informe non acorde coas NTA en función das variables descritas. Os resultados alcanzados permiten concluír que os informes non sempre se redactan de acordo coas NTA, pois conteñen erros. Os informes con opinión cualificada son os que maiores desviacións presentan con respecto ás normas, sendo os auditores que exercen a título individual os que maior propensión teñen a emitir informes non acordes coas NTA, en comparación coas sociedades ou coas multinacionais. Palabras clave: Calidade da auditoría / NTA / Opinión de auditoría / Firma de auditoría / Erros.

International efforts to harmonize the audit report, spearheaded by the International Auditing Practices Committee of the International Federation of Accountants (IFAC), culminated in the issuance of International Standard on Auditing (ISA) 13 in 1983. The stated purpose of ISA 13 was to: ''provide guidance to auditors on the form and content of the auditor's report issued in connection with the independent audit of the financial statements of any entity.'' The purpose of this paper is to assess whether ISA 13 has resulted in greater international harmonization of audit reports. We assess the level of harmonization both by examining the extent to which countries have adopted ISA 13 and by the extent to which the content of the auditor's report has changed. A survey of IFAC's member organizations in 86 countries netted 50 responses. Eighty-six percent of respondents (and 93% of respondents from developing and emerging economies) said they have achieved harmonization with ISA 13. We compared the auditor's reports (in financial reports) of 450 companies in 33 IFAC member countries on two different dates (a pre-ISA 13 date and a post-ISA 13 date). The results suggest a higher degree of conformity with the standard for the post-ISA 13 reports. Finally, cluster analysis was conducted to explore the dynamics of clustering from pre-ISA 13 to post-ISA 13 regimes. A slight drop in the divisiveness coefficient (DC) was observed for the total audit report elements as well as for the form elements, suggesting a less cohesive cluster structure for the post-ISA 13 regime. The empirical evidence, taken as a whole, shows reduced diversity of practices and standards involving the 0020-7063/02/$ -see front matter D 2002 University of Illinois. All rights reserved. PII: S 0 0 2 0 -7 0 6 3 ( 0 2 ) 0 0 1 7 2 -3 audit report since the issuance of ISA 13. This conclusion should provide encouragement for international standard-setters.