Critical Analysis: Competitive Audiing And Audit Quality

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Competitive Tendering and Audit Quality

Auditing is used to enhance the degree of confidence that users of financial statements have in those statements. This is achieved through gathering sufficient evidence to come to a conclusion on whether the financial statements are prepared “in all material respects, in accordance with the applicable financial reporting framework”. (IFAC, 2013). This usually refers to how true and fair the statements are when looking at the financial position of the company at the end of the period.
The word audit is derived from the Latin word “audire”, which means “to hear”. Matthews states that the term derives from medieval book-keeping practices where auditors would hear the accounts read out for them. In the modern day, it is a process which involves the obtainment and evaluation of evidence regarding assertions about economic actions and events. (Silvoso, 1972).
Any subject matter may be audited, the most common application being related to a legal person. Other areas where auditing can be applied include: quality management, project management, energy conservation and internal controls. Auditing standards provide an important foundation supporting audit quality. Particularly in International Standards on Auditing (ISAs) issued by the IAASB, where …show more content…

More regular switching not only opens up the market to greater competition but also reduces the long tenures that can reduce the appearance of objectivity”. (Gov.uk, 2014).
This means that the more regular switching, and thus shorter tenures will ideally result in higher audit quality due to less apparent objectivity, and a fresher take on the assessment of the financial position of the company. On the other hand, it can be argued that short tenures result in the auditor having less knowledge about the client and hence a lower level of audit

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