Opportunities and Challenges for Auditors under Australian Auditing Model

Running head: AUDITING AND ASSURANCE SERVICES
Auditing and Assurance Services
Name of the Student
Name of the University
Author’s Note

1AUDITING AND ASSURANCE SERVICES
Synopsis
The main aim of this essay is to analyze the opportunities and challenges faced by the auditors
under the Australian auditing standard. It can be seen that the auditors can get major
opportunities like the selection of correct audit procedures, maintaining audit skepticism,
professional judgment and others from the Australian auditing standard. At the same time, the
auditors face ethical challenges while complying with the Australian auditing model.

2AUDITING AND ASSURANCE SERVICES
Introduction
In today’s business world, Auditing Profession is considered as a major factor that largely
contributes towards the success of the companies. Auditing is regarded as the process to conduct
inspection and analysis on the financial statements of the business entities in order to make sure
that they are free from any material misstatements (William Jr, Glover & Prawitt 2016). The
presence of material misstatements is a major barrier for the users of financial statements to
judge about the financial performance as well as financial standings of the companies as it
provides a false financial picture of the entities (Eilifsen et al., 2013). There is not any exception
of this fact in Australia. In Australia, it is the requirement for the auditors to comply with the
principles and standards of Australian auditing model, known as the Auditing and Assurance
Standard Board of Australia (AUASB). The main objective of the development of this auditing
model is to provide the auditors with opportunities and advantages to provide quality audit
service to the clients (auasb.gov.au, 2018). However, in the recent years, it can be observed that
the auditors are facing some of the major challenges at the time to provide the professional
services to the clients and they are facing these challenges while complying with the Australian
auditing model. The main aim of this essay is to conduct a discussion on the opportunities and
challenges that the auditors are facing in the presence of the Australian auditing mode. At the
same time, this essay also sheds light on the recent regulatory attempts taken by the regulatory
bodies of Australia in order to improve the audit quality.
Opportunities for Auditing Profession under Australian Auditing Model
From the above discussion, it can be seen that it is the legal requirement for the auditors
to comply with the standards and principles of the Australian auditing standards in order to

3AUDITING AND ASSURANCE SERVICES
conduct the audit operation on the financial statements of the business entities. The auditors can
be majorly beneficial while complying with these auditing standards. It needs to be mentioned
that the Australian auditing model sets out the overall objective for the auditors and this aspect
provide the auditors with the opportunity to understand the nature and scope of the audit
engagement (Chandler, 2014). Based on the nature of the audit engagement, the auditors can take
the crucial decision regarding the selection of audit procedure in order to achieve the audit
objectives. At the same time, the Australian auditing model provides assistance to the auditors to
understand their responsibilities in the audit operations. In order to comply with the standards of
ethics and audit independence, the auditors should be able in identifying their role and
responsibilities. Moreover, in the presence of the Australian auditing model, the auditors can take
the opportunity to extract the historical data of the audit client for conducting the audit
operations (Chandler, 2014).
In this context, it is required to be mentioned about the Auditing Standard ASA 200 that
helps the auditors in maintaining the professional skepticism throughout the audit operations for
the reduction of the audit risks (auasb.gov.au, 2018). Professional skepticism refers to the
attitude of the auditors that includes a questioning mind, to be alert in the conditions of material
misstatements and to be able to critically assess the audit evidences. It needs to be mentioned
that the auditors should be able in maintaining the professional skepticism in order to judge the
validly and truthfulness of the audit evidences (Quadackers, Groot & Wright, 2014). This
standard is majorly beneficial for the auditors as compliance with this standard helps the auditors
in accepting records and documents unless they have enough reason to believe this. At the same
time, it helps the auditors is measuring the reliability of acquired audit information by the
identification of the major issues that lead to the auditors to consider a document is not authentic