Thursday, 31 January 2013

International Standards on Auditing:

Having sat and passed the exams for the Association of Certified Chartered Accountants  over a period of time, while working in a firm of chartered accountants and using a combination of work experience, learning from texts,  learning answers off of past papers, practicing questions in "mock" examination style booklets to give myself an edge in terms of speed, mental preparation for the real thing, I came to realise that studying and passing exams were not the easiest thing in the world.  When it came to work, I was fairly disciplined, however as time passed I realised that learning from books was not necesarily the best approach for me as I was more interested in reading novels than
a text and still am.
In a profession, where to specialise in either audit or tax which are the fields where most of the income is earned, meant that you could quote  the section of the Act, to support your cause, understanding how things worked, the sources of information  was a much easier choice.
Also having taken a career break for some years, on returning to the profession, I realised that  while we learnt to audit using certain concepts, the terms had changed, so that while previously we tested for risk, now we looked at assertions. One of the things that had changed was access to information, such as the existence of wiki, where you can read the entire set of International Standards on Auditing free of charge or purchase them. See the following link.
At this time, there is no reason to learn the standards as my interaction with auditors is now from the other side of the fence, however I will run through the Standards and perhaps write a bit on one or two.  
 However for now, I will deal with the standards in Summary. The standards are divided into the seven categories as indicated below. While the standards are primarily used by the auditors during the course of the audit, with the sope of the audit guiding the use of same,there are times when the auditors'  use of the standards are reviewed by  their peers as part of the review of the quality of work done by an auditing company.
From a business perspective, having knowledge of the standards and being able to apply them as a person operating at different levels in  a business, will be beneficial in the long run for some of the following reasons: Understanding and use of the standards allow persons on a team to function using the same rules. Just as International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS's) guide you on accounting treatments, disclosures in the financial statements, Standards on Auditing guide you on the processes/testing/documentation  which are assessed  by different parties. So for example, respective responsibilities can be used in any type of contract, it may be all about understanding what is being reveiwed and checking your documentation. 



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