Auditors are regulated by professional bodies and should follow recognised auditing standards such as International Standards on Auditing (ISAs).
Required:
Explain why it is important for audits to be conducted in accordance with Auditing Standards that are common to all audits. (6 marks)
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- A variety of stakeholders might read a company’s financial statements. Some of these readers will not just be reading a single company’s financial statements, but will also be looking at those of a large number of companies, and making comparisons between them.
- It is important that the audit profession is regulated and that auditors follow the same standards because many of these readers want assurance that when making comparisons, the reliability of the financial statements does not vary from company to company.
- This assurance will be obtained not just from knowing that each set of financial statements has been audited, but from knowing that this has been done in accordance with common standards.