Question

1. Advantages and disadvantages of international standards on auditing to auditors
2. Effects of ISAs being enforceable by law

Answer 1

The international standards on auditing auditors have several advantages and disadvantages related to the performance of tasks. The merits realized include access to the capital market, ensuring the public remains guided by security exchanges and requirements laid out. The government then validated the auditing process in collaboration with the public authorities and central banks (Burns et al., 314). Second, a deterrent to fraud and inefficiency ensures that auditing focuses on claimed accounts department. The approach ensures that in instances of loss, assets maintained in the form of funds are transferred.

In instances whereby the public has separate ownership, the dispute is resolved through insurance claims. Also, obtaining information regarding profit and loss is easily gathered from the companies through auditing. Essentially, employees disclose the challenges they are facing and offer approaches to possible solutions that enhance lasting resolutions (Burns et al., 318). The demerits encountered comprise; extra costs incurred in the course of the auditing process. The chances of fraud are also evidenced whereby individuals are compelled to commit crimes to align with the audit reports.

International Standard on Auditing (ISA) being enforceable by law may directly affect the financial statements derived from involved institutions. The enforcement accommodates for determination of the amounts and ends up disclosing the entity's financial statements (Boolaky et al.,72). The disclosing calls for critical concern since the involved companies are closely monitored by the public on their profit and losses. The law provisions are strictly followed since violation of provisions results in fines, involvement in litigation processes, and effects on the agency's financial statements.

Work Cited

Burns, Jennifer, and John Fogarty. "Approaches to auditing standards and their possible impact on auditor behavior." International Journal of Disclosure and Governance 7.4 (2010): 310-319.

https://link.springer.com/article/10.1057/jdg.2010.21

 

Boolaky, Pran K., and Teerooven Soobaroyen. "Adoption of International Standards on Auditing (ISA): Do institutional factors matter?." International Journal of Auditing 21.1 (2017): 59-81. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The international standards on auditing auditors have several advantages and disadvantages related to the performance of tasks. The merits realized include access to the capital market, ensuring the public remains guided by security exchanges and requirements laid out.