The Role of Audit
The Role of Audit An audit is ‘an independent examination of, and the subsequent expression of opinion on, the financial statements of an organization’ (Hussey, 1999, p. 33). The audit can be viewed as an integral part of corporate financial reporting, where the assurance it provides stems from the trust placed in the judgement of the auditor. The audit is designed to demonstrate ‘the completeness, accuracy and validity of transactions which, when aggregated, make up the financial statements’ (Power, 1997, p. 24).
An audit is ‘an independent examination of, and the subsequent expression of opinion on the financial statements of an organization’. (Hussey 1999). “There has to be an explanation of why auditors do what they do ,what they believe they can achieve an what the public think they can achieve.”(Flint 1988)
The postulate approach is designed to create a conceptual framework for audit practice. They identify various circumstances and requirements for the audit to be carried out in an efficient manner and ignore the alternative perspectives on the meaning of professionalism, managerial and commercial orientations of audit practice. In short it’s a normative approach which tells us “what what should be done” than “what is”.
Postulates are “assumptions that don’t lend themselves to direct verification. The proposition deducted from postulates (..), however can be directly verified and such verifications bears evidence of the truth of the postulates themselves.” (mautz and sharaf 1961). In other words , postulates are the basis of making valid and useful assumptions and the basis of thinking about problems and arriving at solutions .
The postulates are set up in a framework which includes justifying postulates, behavioural postulates, and functional postulates. Using the postulates you can derive four major concepts of auditing which are independence, responsibility, evidence, and reporting.
Justifying postulates is the reason for companies to be
An audit is ‘an independent examination of, and the subsequent expression of opinion on the financial statements of an organization’. (Hussey 1999). “There has to be an explanation of why auditors do what they do ,what they believe they can achieve an what the public think they can achieve.”(Flint 1988)
The postulate approach is designed to create a conceptual framework for audit practice. They identify various circumstances and requirements for the audit to be carried out in an efficient manner and ignore the alternative perspectives on the meaning of professionalism, managerial and commercial orientations of audit practice. In short it’s a normative approach which tells us “what what should be done” than “what is”.
Postulates are “assumptions that don’t lend themselves to direct verification. The proposition deducted from postulates (..), however can be directly verified and such verifications bears evidence of the truth of the postulates themselves.” (mautz and sharaf 1961). In other words , postulates are the basis of making valid and useful assumptions and the basis of thinking about problems and arriving at solutions .
The postulates are set up in a framework which includes justifying postulates, behavioural postulates, and functional postulates. Using the postulates you can derive four major concepts of auditing which are independence, responsibility, evidence, and reporting.
Justifying postulates is the reason for companies to be