Question

The Standard is largely aspirational, and is not reasonably practical in audits of small to medium-sized companies. The fact that many of the procedures are recommended, but not required, only adds to this criticism and causes uncertainty as to what procedures are actually necessary. For example, SAS 99 recommends that auditors use surprise tactics such as making unannounced visits to audit inventory. In practice, auditors typically advise clients when they intend to visit inventory locations as a courtesy to avoid unnecessarily inconveniencing their clients. This advance notice invariably limits the auditors’ efficacy at uncovering inventory fraud; however, many auditors suggest that they can enact adequate safeguards without unreasonably imposing on their clients. What can be said about these criticisms?

Answer 1

Stnadards set are the recommendations of how an auditor shall perform their duties. It is true that in practice many of these standards are not followed as per their words but they are followed in their spirit. Also it is unimaginable everytime to follow the standards strictly, auditors have to apply thier own judgements along with the standards requirement, however this has invited criticism as auditors take the scape route stating that the standards were just recomendary and not mandatoy whenever there are some errors disclosed in their work. Although such cases are rare, and auditors over the time have proved their metal again and again by disclosing the material errors by following standards along with their own judgements for the smooth conduct of the audit procedures. Also, frauds are many times gets unnoticed when the standards were followed in their letter and spirit.

Thus though the criticisms holds true in some times, but they are not the actual pictures and lot is dependent upon the acutal position on the ground also.