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5 An Analysis of the Audit Framework Focusing on Inherent Risk and the Role of Statistical Sampling in Compliance Testing Donald A. Leslie Clarkson Gordon Auditors are a loyal brotherhood of arithmetic wizards who when their profession starts to go down the pipe . . . band together and disagree with one another. with apologies to J. Hart The highly competitive professional environment that has developed in the U.S. over the past 10 years has spread like a cancer throughout most of the world. As a result, meaningful professional standards are currently more important to the profession's survival than at any time in its relatively short existence. Competition can and should be healthy for a profession, ensuring that users of the professional services receive "value for their money" and that the profession keeps "abreast of modern technology." Unfortunately, far too many users of accounting services are tending to treat them as simple commodities that can be purchased like "groceries on a shelf." Some observers are of the opinion that "the standard audit is increasingly viewed as a simple commodity item" and that "a lot of companies are starting to treat their accountants the way they treat their janitorial service."1 Extracts from a recent interview with Ralph Walters on the subject of accounting regulation and competition in the profession in the U.S. are set out in the Appendix. The purpose of this paper is to assist the profession in establishing a common audit objective.* In order to ensure that readers do not misinterpret my intent, I should make it clear at the outset that I do not believe that it is necessary for all auditors to carry out their audits in exactly the same manner in similar situations. Rather, it is important that the work that every auditor carries out achieves a clearly established and well understood audit objective. Specific audit strategies, audit techniques, and levels of staff expertise and competence (used to achieve the audit objective) will vary, and it is this variation that will provide proper, healthy competition for users of accounting and auditing services. * Some might argue that current professional pronouncements in Canada and the U.S. provide for a common audit framework. Others (myself included) would respond with "current practice certainly does not support this view." 89
Analysis of the audit framework focusing on inherent risk and the role of statistical sampling in compliance testing
Leslie, Donald A.
Stettler, Howard, ed.
Ford, N. Allen, ed.
Auditing -- Statistical Methods
Risk assessment -- United States -- Auditing
Auditing Symposium VII: Proceedings of the 1984 Touche Ross/University of Kansas Symposium on Auditing Problems, pp. 089-125
|Source||Published by: University of Kansas, School of Business|
|Rights||Contents have not been copyrighted|
|Format||PDF page image with corrected OCR scanned at 400 dpi|
|Collection||Deloitte Digital Collection|
|Digital Publisher||University of Mississippi Library. Accounting Collection|