Any work is done more efficiently and effectively if it meets certain standards that have been developed over time under the influence of practical experience. Audit is no exception - moreover, it is difficult to imagine a sphere of activity in which standardization would be more in demand. In this article we will talk about what are audit standards, what types they are and how they are applied.
Accounting historically and logically is primary with respect to audit, which is completely logical, because audit is a check of the quality of accounting in order to identify random or intentional errors. Then it is reasonable to assume that the audit takes over some characteristic features of accounting. One of the most important of these features is the use of accounting standards - special documents containing rules and recommendations regarding bookkeeping. These standards were formed after the Second World War, during the rapid development of international organizations. The development and distribution of these documents was carried out by the International Federation of Accountants. From a practical point of view, the need to create standards was explained by the phenomenon of globalization - the economies of different countries were increasingly tied together, forming a single mechanism of the global economy. Therefore, the unification of accounting in different countries greatly facilitated the work of accountants and financial analysts of both individual firms and their controlling bodies, and most of all, rapidly developing multinational corporations. With the beginning of the development of audit activity, there was a need to create documents such as audit standards. Thanks to their adoption, a unified approach to the audit was developed, which again significantly facilitated the lives of both the auditors themselves and their clients.
It is also important to pay attention to how audit standards are classified. As a rule, the most popular is the classification by the scale of the subject who has adopted one or another standard:
1) International auditing standards - adopted by the International Federation of Accountants and regulate the general grounds for conducting audits in all countries that are members of the IFAC.
2) National audit standards - adopted by the governments of individual countries and regulate the forms and methods of audit in accordance with the peculiarities of national legislation and accounting. If a country is a member of IFAC, then its national standards cannot contradict international standards, and in most cases they are a complete copy of world standards.
3) Intrafirm audit standards - operate within one company, determining its corporate policy and “corporate identity” in conducting audits. If a company operates in only one country, its internal standards cannot contradict national ones, and if the audit firm is a transnational corporation (like the representatives of the Big Four - Ernst & Young, Deloitte, KPMG and PricewaterhouseCoopers), then its internal standards must comply with international standards .
Auditing standards are a kind of instructions for conducting an audit - they clearly outline the procedures that are carried out during various types of audits, indicate the necessary sample sizes and allowable values for the significance of errors. Compliance with the standards guarantees the quality of work on checking the status of accounting at the enterprise, which means that you can be sure that customers will not file a claim with the auditor because of losses caused by an unfair audit.