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Advanced Auditing

Notes 2.3.2 Compliance with Auditing Standards

The members of the Institute shall follow high standards of fairness, integrity and ethical conduct,
achieve their work with honesty, diligence, and responsibility and observe the standards and
make disclosures expected by the law and the profession. They should be not knowingly be a
party to any illegal activity, or engage in acts that are discreditable to the institute. Respect the
integrity of other members, recognizing their different experiences and areas of expertise, and
contribute to the legitimate and ethical objectives of the institute.

Self Assessment

Fill in the blanks:
6. After taking into the comments received, the draft of the proposed auditing standard is
finalised by the Board and submitted to the ................................... of the Institute.
7. While formulating the ................................... the Board also takes into consideration the
applicable laws, customs, usages and business environment in the country.
8. The members of the Institute shall follow high standards of ......................, ..........................
and ......................
9. The Institute of ................................... of India is a member of the International Federation of
Accountants.
10. The ICAI has issued thirty five auditing standards corresponding to the ...................................
Standards issued by the IAASB of the IFAC and three auditing standards are in the pipeline.

2.4 International Financial Reporting Standards (IFRS)

In an increasingly interconnected global economy, many market participants are considering
the question of whether it is possible or desirable to move toward a more uniform global
“language” for financial reporting. The proponents of this idea argue that a uniform set of
global accounting standards, supported by strong governance, independent standard-setting
and a sound regulatory framework, could benefit investors and businesses alike. Others suggest
that trying to establish a uniform set of global standards would run the risk of overlooking the
unique economic, political, cultural, legal and regulatory realities that exist in different nations
and regions.

In the coming years, critical decisions will need to be made regarding the use of global accounting
standards in the United States. Market participants will be called upon to determine whether
achieving a uniform set of high quality global accounting standards is feasible, what sort of
investments would be required to achieve that outcome, and whether it is a desirable goal in the
first place. This dialogue will be critical to the future of financial reporting and of fundamental
importance to the long-term strength and stability of the global capital markets.

Did u know? In 2001, the International Accounting Standards Board (IASB) adopted the first
iteration of International Financial Reporting Standards (IFRS) to serve as a possible
pathway for establishing uniform global accounting standards.

2.4.1 The Evolution of Accounting Standards

Accounting standards around the world have evolved over centuries of business and capital
market development. In this process, accounting standards historically were designed to meet

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