The auditor’s role in the context of the accounting
regulations evolution
Author:
Ionela POIDA (IVAN)
JEL:
M 410
DOI:
10.20869/AUDITF/2018/150/015
Keywords:
the evolution of the regulations, principles
based accounting, fair value presentation, financial
reporting, and financial statements.
Abstract:
The purpose of this paper is to demonstrate the
importance of the auditors ‘role in validating the
appropriate application of the International Financial
Reporting Standards as a result of numerous changes
and the complex situations from day to day, from the
perspective of choosing the right method, respectively
from the perspective of verifying compliance with these
standards.
The harmonization of the provided information facilitates
the comparison in time and between companies,
ensuring consistency a more granular discipline in
reflecting the economic transactions.
The aim is to achieve the harmonization of the
accounting methods and principles by adopting the
same set of Accounting Standards. Having the
normalization process as a starting point, the
harmonization can be achieved through a convergence
process built by gathering all the useful and constructive
information from the past experiences. The main
objectives are to use the same language and to quantify
the impact of change using the same set of tools. The
distinctive element relates to the culture of each
organization, but the way in which the financial
statements are prepared and the way in which they are
presented will remain the same if the full harmonization
is achieved.
Most of the time, the auditor has to assess the impact of
an accounting selection at the expense of another option
and to decide whether the results obtained, respectively
the information provided by the entity are accurate and
do not include misstatements that could significantly
affect the financial statements.
The selection process involves evaluating the results
compared to the objectives set by the regulatory system.
The role of the auditor is to assess the degree of
compliance of the financial statements with an
applicable financial reporting framework. The auditor's
objectives are to obtain reasonable assurance that the
financial statements taken as a whole are free from
material misstatements which may be caused by error or
fraud and to issue an audit report that includes the audit
opinion. The auditor’s integrity and objectivity are directly related to the freedom from any constraint, which could
affect the expression of the audit opinion. In other words,
the auditor should never be affected by the influences
that might compromise the professional judgment.
The speed of the changes from accounting may
compromise the way in which the professional judgment
is applied due to the complexity of certain cases. The
International Auditing Standards provide the following
guideline: when the auditor is no longer in a position to
evaluate a case, a specialist/ expert may be contracted.
The loss of independence occurs when the auditor is
influenced by the client to "overlook" certain deviations
from the provisions of the International Financial
Reporting Standards.
The evolution of the accounting standards directly
impacts the auditor's activity, as it is also shown in the
study presented below. The results obtained can be
extrapolated as the study focuses on a research related
to the quantification of the impact of regulatory
developments on the auditor's work.
Abstract(225KB)
Article(403KB)