understanding of the history, legal and professional framework within which an audit of financial information and systems takes place
appreciation of the necessary audit techniques, judgement and practical skills as applied to both manual and computer-based systems
awareness of current developments in the auditing profession, both in the UK and internationally
What is an audit?
“A systematic process of objectively gathering and evaluating evidence in order to ascertain whether assertions about economic actions and events made by individuals or organisations correspond with established criteria and communicating the results of the examination to users of the reports in which the assertions are made.” (American Accounting Association, Statement of Basic Auditing Concepts)
Auditing gathers and evaluates evidence with respect to the information created by directors and accountants. It is an evaluation process
Auditor reports on the ...view middle of the document...
It has no purpose or value except its practical usefulness,’ Flint 1988
‘Audit is a social control mechanism for securing accountability. The onus is on auditors and audit policy-makers constantly to seek out what is the societal need and expectation for independent audit’ Flint 1988
Development of a theory
Postulates – Basic assumptions about auditing
Essential to the development of any intellectual discipline
Assumptions that do not lend themselves to direct verification
A basis for inference
A foundation for the erection of any theoretical structure
Susceptible to challenge in the light of later advancement of knowledge
Lead to key concepts of auditing
Mautz & Sharaf 1961
APB – The Auditors Code 2009
Auditors add to the reliability and quality of financial reporting; they provide to directors and officers constructive observations arising from the audit process; and thereby contribute to the effective operation of business capital markets and the public sector.