As a demand driven discipline, audit has contributed to the advancement of civilization”. State your position with
appropriate argument highlighting the functional, legal and social construct of the profession.
Auditors are responsible to provide an independent opinion on the true and fair view of the financial statements after he has acquainted himself with all the relevant and reliable evidences with the client. Auditor is expected to a professional adroit with sufficient proficiencies and competence to assess whether the view that has been portrayed by the financial statements represent the true financial position, financial performance and changes in the financial position.
In this paper our focus will not only be on the practices of auditing but also will be to the extended perspective to the auditing as a demand driven discipline which constantly and continuously meets the expectations arose out of the functional, social and legal constructs. It outlines some reflections on auditing as a demand driven discipline rather than discussing only the practices of auditing. It is very important to understand auditing and its vivid prominent place in the economy and such comprehension can be better done by taking a critical approach to the industry and the audit process. Part of the confusion today surrounding the role of auditing stems from 15
a misunderstanding is its nature and precise role. Here the objective is not to simply add to the great accumulation of information about audit practices, but to understand and explain them.
Business is subject to continuous changes brought about by technological advances, globalization and internationalization, and the ways entities are organized and conduct their business. Management’s increasing discretion over corporate accounts, and unprecedented competitive pressure have also increased the danger of fraudulent financial reporting. The scandals and financial failures of recent years have been a force driving change, especially in the attitudes of market regulators. Thus corporate reporting and the auditing profession are being swept along by this change. Genesis and the Evolution of Audit
Auditing starts where accounting ends. The present status of the auditor’s report and independent auditing represents the culmination of a century of development. Auditing emerged as a demand driven discipline meaning as an auditor you have an obligation to respond to the demand of the society. Auditing comes with another four significant terms that is accounter, accountee, accounts and accountability. The term audit originates from the Latin word audire, which means “to hear.” At the time of industrial revolution accounting was oral or verbal. As there was no financial statement in the industrial revolution and many of the parties interested in the audit findings were illiterate, audits were presented orally. Accounting and auditing both are European contribution. At the then time manorial system was found in Britain. The land owners had vast number of lands and property and managing those was tough. So they employed “Agent” to manage those properties, here conflict of interest arose and thus the demand for audit emerged. Now we can divide the time frame of the origin of auditing into following five chronological periods: (i) Prior to 1840;
(iv) 1960s-1990s; and
Prior to 1840
By and large, the early historical development of auditing is not well documented (Lee, 1994). Auditing in the form of ancient checking activities was found in the ancient civilizations of China (Lee, 1986), Egypt and Greece (Boyd, 1905). The ancient checking activities found in Greece (around 350 B.C.) appear to be closest to the present-day auditing.
The emergence of a “middle class” during the industrial revolution period provided the funds for the establishment of large industrial and commercial undertakings. In...
References: Teck-Heang Lee, Azham Md. Ali (2008). The evolution of auditing: An analysis of
the historical development, Journal of Modern Accounting and Auditing, ISSN1548-
6583, USA, Dec. 2008, Vol.4, No.12 (Serial No.43).
Campbell Tom and Houghton Keith (2005). Ethics and Auditing. ANU E Press,
Canberra ACT 0200, Australia.
Stettler F. Howard (1977). Auditing Principles. Prentice Hall, 4
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