Question

1. Describe briefly what might be regarded as ‘audit quality’ and how ‘audit quality’ might be assessed. 2. Outline and discuss how auditor’s independencemight impact ‘auditquality’. 3. Outline and discuss how the audit expectations gap might impact ‘auditquality’.

Answer 1

1. Audit quality is a process of systematic examination of a quality system carried out by an internal or external auditor or an audit team. Audits are basically done for internal management as well as external users. In the process of an audit the auditor or an audit team review all the day to day invoices, company's financial statements , all ledgers , reports , physical verification (inventory ) etc. Quality audit helps to the management to make their performance effective and operate their business with compliance. The international auditing and assurance standard board is regulatory agency and has made some standards of quality audit which has to be compny be the auditor as well as has to maintain ethics and other regulatory requirements.

2. The independence of auditor's in audit quality has dual impact it may be helpful for quality audit or it may impact the standards of quality audit if auditor become more familiar with the Client than might be the auditor not performed as per the standards of quality anudit or if he has independent to do the audit than may be he or she can do audit in a better way with the standards .

3. The audit expectation gap is defined as the difference between what the public expects from an audit and what audit profession accepts the audit objective to be. The audit expectation gap is critical to the auditing profession because the greater the unfulfilled expectations from the public, the lower is the credibility, earning potential and prestige associated with the work of auditors.