The Future Directions of the Auditing Profession
BFA303
AUDITING
THE FUTURE DIRECTIONS OF THE AUDIT PROFESSION
Word Count: 1995
Executive Summary
This report discusses the historical and current practices required by audit professionals. This is broken down into three main subject areas, being:-
1 The Monitoring of the Profession’s Quality Issue;
2 The Skills and Auditor Needs To Posses; and,
3 The Structure of an Audit and Non Audit Service Engagement.
It is found from a comprehensive review of various literature available and previous studies that have been conducted on the topic that there have been extensive efforts to maintain an acceptable level of quality and monitoring within the audit profession with new and amended processes being put in place. However the success of such will depend on the ability of professional accounting bodies and the federal government to continuously raise the quality of the financial reporting standards whilst maintaining rigorous oversight, being constantly on the watch for loopholes and legislative flaws, of the business sector.
TABLE OF CONTENTS
1 Introduction - 1 -
2 The Monitoring of the Profession’s Quality - 1 -
2.1 SARBANES-OXLEY ACT - 2 -
2.2 CLERP 9 ACT - 2 -
2.3 AUDIT-PARTNER ROTATION - 2 -
3 The Skills and Auditor Needs to Posses - 3 -
4 The Structure of Audit and Non Audit Service Engagements - 5 -
5 Conclusion - 6 -
6 Recommendations - 6 -
7 References 8 1 Introduction
The role of an auditor is extremely important to the successful continuance of the entire corporate sector. This role is becoming increasingly complex and more rigorously standardised as the professional environment is subject to a seemingly never-ending cycle of fraud and scandal, and the occurrence of large corporate failures.
In answer to this changing environment, many new reforms, legislation and standard amendments have been being introduced and strictly enforced by both the major professional accounting bodies and the federal government in
AUDITING
THE FUTURE DIRECTIONS OF THE AUDIT PROFESSION
Word Count: 1995
Executive Summary
This report discusses the historical and current practices required by audit professionals. This is broken down into three main subject areas, being:-
1 The Monitoring of the Profession’s Quality Issue;
2 The Skills and Auditor Needs To Posses; and,
3 The Structure of an Audit and Non Audit Service Engagement.
It is found from a comprehensive review of various literature available and previous studies that have been conducted on the topic that there have been extensive efforts to maintain an acceptable level of quality and monitoring within the audit profession with new and amended processes being put in place. However the success of such will depend on the ability of professional accounting bodies and the federal government to continuously raise the quality of the financial reporting standards whilst maintaining rigorous oversight, being constantly on the watch for loopholes and legislative flaws, of the business sector.
TABLE OF CONTENTS
1 Introduction - 1 -
2 The Monitoring of the Profession’s Quality - 1 -
2.1 SARBANES-OXLEY ACT - 2 -
2.2 CLERP 9 ACT - 2 -
2.3 AUDIT-PARTNER ROTATION - 2 -
3 The Skills and Auditor Needs to Posses - 3 -
4 The Structure of Audit and Non Audit Service Engagements - 5 -
5 Conclusion - 6 -
6 Recommendations - 6 -
7 References 8 1 Introduction
The role of an auditor is extremely important to the successful continuance of the entire corporate sector. This role is becoming increasingly complex and more rigorously standardised as the professional environment is subject to a seemingly never-ending cycle of fraud and scandal, and the occurrence of large corporate failures.
In answer to this changing environment, many new reforms, legislation and standard amendments have been being introduced and strictly enforced by both the major professional accounting bodies and the federal government in
References: Viewed 4 May, 2008. Cooper, K & Hemant, D. (2005). Recurring Cycle of Australian Corporate Reforms: “A Never Ending Story.” Journal of American Academy of Buisness, Cambridge; Sept 2005; 7,2; p 156 – 163. DeFond, M.L, Raghunandan, K., Subramanyam, K.R. (2002) Do Non-Audit Service Fees Impair Auditor Independence? Evidence from Going Concern Audit Opinions Journal of Accounting Research 40 (4) , 1247–1274 doi:10.1111/1475-679X.00088. Jubb, C & Houghton, K., (2007). The Australian Auditing and Assurance Standards Board After the Implementation of CLERP 9; Australian Accounting Review; July 2007; 17,2; Accounting & Tax Periodicals. P 18 – 27. Lavelle, L. (2002) "The Best & Worst Boards," Business Week, 7 October, pp. 104 - 114. Onrin, R.M., (2007) Ethical Guidance and Constraint Under the Sarbanes-Oxley Act of 2002, Journal Of Accounting, Auditing & Finance Pearson, D. (2008) Role of Public Sector Audit Committees: An Auditor- Generals Perspective. http://download.audit.vic.gov.au/files/speeches/20080213_Deloittes_Audit_Commmittees_Meeting.pdf Viewed 4 May, 2008. Salmon, F.M., & Carson, E. (January 2008) "The Impact of The Sarbanes-Oxley Act on Australian Listed Firms." Available at SSRN: http://ssrn.com/abstract=1091065 Smith, B Viewed 4 May, 2008.