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Advanced Auditing

Notes 7. The auditor is responsible for obtaining reasonable assurance that the financial statements,
taken as a whole, are free from ...................................
8. The ................................. are required to make qualification in their report in case any item
is treated differently from the prescribed Accounting Standard.

14.3 Current Issues in Auditing

Auditing, like many other disciplines, is a fast changing discipline. There are a surprisingly
large number of current issues. There will continue to be new issues and it is therefore important
for a professional accountant/auditor to be continuously updating himself/herself, inter alia, by:

 Reading professional journals.
 Attending seminars, workshops and symposia.

14.3.1 Matters Influencing Auditing

There are several matters which influence auditing and give rise to current issues. These matters
are:

1. Statute laws: Statute laws enacted by parliament are likely to have profound influence on
auditing, e.g. Public Procurement Act 2004, Money Laundering Act.

2. Development of new accounting standards and guidance by international bodies like the
International Accounting Standards Board (IASB) of IFAC.

3. The issue of corporate governance which has become an international concern. This requires
auditors to be more vigilant in their audit assignments.
4. Scandals such as the collapses of Enron, WorldCom, BCCI and Maxwell shortly after clean
audit reports have led to doubts about the competence end integrity of audit firms which
were involved.
5. Development of new opportunities for auditing type of work. These include environmental
and social auditing, VFM auditing and assurance reporting of various types.
6. The economics of auditing have led to changes in practice. The business risk approach is
now a new development. Auditors now spend too much time on their computers doing
analyses and too little time talking to people and getting to grips with real things and real
documents.
7. We now live in a much more litigious society and auditors have to practice more defensive
auditing to avoid being sued. This may get in the way of desirable innovation.

8. The legal status of audit firms is now an issue. Should they be partnerships, limited
liability companies or limited liability partnerships?

9. Global economy has led to auditing becoming more international. This needs
harmonisation of auditing practices in all countries, e.g. by application of International
Standards on Auditing (ISAs).
10. Use of computers in auditing.
11. E-commerce may become a dominant way of doing business. Auditors have to adopt
themselves to this development.

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