Like any other activity relating to such an important sphere of life of any enterprise as its financial condition, the audit must be strictly regulated in order to exclude the possibility of poor-quality audit. It is also important that today, in an age of rapid globalization and internationalization of the economic life of the whole world, in all countries, audits are carried out according to the same scheme. This is especially important for multinationals, which are made up of many affiliates scattered around the world. It was in order to unify the audit process , and international audit standards were adopted
What are they? International audit standards are special documents that contain the requirements for auditing the financial condition of enterprises. These standards are issued by the international federation of accountants, and are widely used throughout the world. First of all, the most famous and major users of ISA are representatives of the so-called “Big Four”, which includes Ernst & Young, PriceWaterHouseCoopers, K-P-M-G and Deloitte. Since these audit firms are multinational companies, in their activity they take precisely the international audit standards as the main guide to action.
However, it is worth noting that the ISA is not only used by representatives of the Big Four. The fact is that international and national audit standards are closely interrelated, and most countries create their own standards precisely taking into account international experience. This allows us to further unify audits and provide the most standardized audit anywhere in the world.
Classification of international audit standards is a division of them into certain categories in accordance with some sign of classification. Typically, there is only one attribute in the classification - the logical stage of the audit, which is related to a particular standard. That is why international auditing standards are divided into the following categories:
- Introductory aspects - give an idea of the conceptual basis of the audit and conducting the audit;
- Duties - disclose all the responsibilities of the auditor to the customer, regulate the conclusion of agreements on the audit, pay attention to the inadmissibility of the disclosure by the auditor of information received in the client's company;
- Planning - international audit standards of this category give an idea of drawing up an audit plan, taking into account risks, materiality and some other points that are important in planning an audit ;
- Internal control system - explains how to analyze the accounting system and internal control of the company.
- Audit evidence - international audit standards regarding evidence are one of the most important because they regulate what documents can be accepted by the auditor as evidence of a particular operation, and are also ranked by degree of reliability;
- Using the services of third parties - explain in what cases the auditor has the right (or even the obligation) to resort to the help of unauthorized persons during the audit;
- The audit report and conclusions - regulate the mandatory points and types of audit report, which will be presented at the end of the audit to the management of the enterprise;
- Specialized areas of audit - provide information on audits in highly specialized areas;
- Related services - regulate the list of additional services that an audit firm can provide.