Auditing and Assurance: Enhancing Audit Quality and Market Confidence

This essay provides an overview of auditing and assurance, emphasizing the role of the International Federation of Accountants (IFAC) and its impact on global accounting practices, particularly in Australia. It highlights the importance of professional skepticism and quality control in ensuring audit quality and maintaining public trust in financial reporting. The essay discusses the requirements for companies operating in Australia to submit annual financial reports to the Australian Securities and Investment Commission and underscores the significance of internal controls in minimizing the risk of material misstatement. Furthermore, it touches on the role of audit committees in enhancing the independence of the audit function and improving the overall quality of financial reports, concluding that continuous improvement in audit quality and consistency is necessary for maintaining market confidence. Desklib offers a wealth of resources for students seeking to deepen their understanding of auditing and assurance principles and practices.

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Auditing and Assurance
Student’s Name
Institution Affiliate
Date

AUDITING AND ASSURANCE 2
Auditing and Assurance
The International Federation of Accountants (IFAC) is a global body concerned with the
provision of various services to the public interest through strengthening and contributing to the
establishment of strong international economies. The main aim of IFAC is to promote and
support the International Accounting Profession and also to offer the IFAC Global Knowledge
Gateway. Such a gateway offers articles and updates aimed at training and supporting
accountants. Additionally, IFAC supports the international standards on accounting which
usually align with the Australian Standards on Accounting. The accountants should aim at the
professional skepticism and quality control. Therefore form the website of IFAC, there are two
relevant things which can be obtained such as;
An auditor has to practice independence and professional skepticism
There should also be audit quality and enhancing aimed at offering quality services which
are of the public interest.
Explanation
According to Earley et al. (2016 p.20) the vision of IFAC is to enable the
acknowledgement of global accountancy profession as crucial to financial markets, economies as
well as strong and sustainable organizations. According to the websites, all the companies which
operates in Australian are expected by the Corporations Act 2001 to submit as well as prepare
their annual financial reports to the Australian Securities and Investment Commission. Such a
commission is the regulator of the nation for financial services, financial markets as well as the
corporate (Lessambo, 2018 p.35).In support of the above mentioned vision, the accountants and
auditors should offer access to the IFAC Global Knowledge Gateway as well as the Independent
Standard Setting Board link website. Such links improve the audit quality in the public interest

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by focusing on professional skepticism and quality control (Knechel and Salterio, 2016 p.100).
Additionally, with the links, the audit and assurance portal will offer a vast wealth of information
for both the accountants and auditors as well as the tile of the article.
According to Gist et al. (2015 p.22), the attitude which is used by the auditors and
accountants while in the process of conduction of an audit is referred to as the professional
skepticism. It is expected of the auditors to remain independent as well as have a questioning
mindset aimed at ensuring that there is a thorough inquiry of all evidence brought forward by a
particular client. The ASA 200 overall objectives of the independent auditors and conduct of an
audit in accordance with the Australian Accounting Standards cover the enhancement of audit
quality and the audit quality control (Louwers et al.2015 p.10). Under the circumstance that,
there are no ways of elimination of various risks, the auditor will minimize the risks to an
acceptable level. The audit risk assessment entails the recognition of assertions and accounts
which are at risk of material misstatement. During the process, there are various risk
consideration usually taken into account such as;
 Complex transactions
 Significant accounting or economic developments
 Transactions outside the normal course of business of a client.
 Significantly related party transactions
Furthermore, the process of risk assessment also entails obtaining of comprehension of the
internal control system of the clients. The clients are required to have internal controls which
would help in the minimization of risk material misstatement(Knechel and Salterio, 2016 p.100)
Some of the ASA’s associated with the risk assessment include ASA 315, ASA 320, ASA 240
and ASA 300.

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Generally, the independence of an audit function is enhanced by an effective audit
committee. Such a committee will help to ensure that an auditor can access evidence as well as
records to enable the financial report to be true and fair (Simnett, Carson and Vanstraelen, 2016
p.15). Consequently, a company with an effective internal audit function, there will be a
modification of the procedures by external auditors and this will eventually minimize the level of
audit testing. Besides the audit risk, a response can be covered through the enforcement of
controls, testing, and procedures. Some of the ASA's which help in attaining such a goal include
ASA 610, ASA 315, ASA 500 and ASA 330.
Conclusion
One of the vital elements of informed investors and market confidence is the quality of
financial reports of a company which is supported by an external audit. An important role played
by an audit committee revolves around the quality of the financial report, and this is based on the
fact that audit quality is associated with independent and effective audit function which is
supported by a particular organization. Even though the main responsibility of an auditor is an
audit quality, an audit committee should promote and support audit quality. Such a role will
largely contribute to enhancing confidence in the information quality provided by companies in
their financial reports. According to the findings by the audit regulators, there is the need for an
improvement in audit quality as well as consistency in the implementation of an audit.
References

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Earley, C.E., Hooks, K.L., Joe, J.R., Polinski, P.W., Rezaee, Z., Roush, P.B., Sanderson, K.A.
and Wu, Y.J., 2016. The Auditing Standards Committee of the Auditing Section of the American
Accounting Association's Response to the International Auditing and Assurance Standard's
Board's Invitation to Comment: Enhancing Audit Quality in the Public Interest. Current Issues in
Auditing, 11(1), pp.C1-C25.
Gist, W.E., Anderson, U.L., Janvrin, D.J. and Pitman, M.K., 2015. Comments by the Auditing
Standards Committee of the Auditing Section of the American Accounting Association on the
IESBA ED Release (August 14, 2014), Proposed Changes to Certain Provisions of the Code
Addressing the Long Association of Personnel with an Audit or Assurance Client: Participating
Committee Members. Current Issues in Auditing, 9(1), pp.C18-C22.
Knechel, W.R. and Salterio, S.E., 2016. Auditing: Assurance and risk. Routledge.
Lessambo, F.I., 2018. The International Auditing and Assurance Standards Board. In Auditing,
Assurance Services, and Forensics (pp. 35-39). Palgrave Macmillan, Cham.
Louwers, T.J., Ramsay, R.J., Sinason, D.H., Strawser, J.R. and Thibodeau, J.C., 2015. Auditing
& assurance services. McGraw-Hill Education.
Simnett, R., Carson, E. and Vanstraelen, A., 2016. International archival auditing and assurance
research: Trends, methodological issues, and opportunities. Auditing: A Journal of Practice &
Theory, 35(3), pp.1-32.