A report on concepts in auditing theory

Prepared by Group – 01

Submitted To:
Abdul Alim Baser
Assistant Professor
Department of Accounting & Information Systems
University of Barishal.
Submitted By:
Serial Member Name Identification
Number Number
01 Golam Rabby 20 AIS 009
02 Mukta Khan 20 AIS 055
03 Dipto Chondro Das 20 AIS 037
04 Subrata Kangilal 20 AIS 036
05 Md. Rakib Hossen 20 AIS 050
06 Md. Hafizul Islam 20 AIS 013

April 11, 2022

University of Barishal.
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Table of Contents
1.1 Introduction .......................................................................................................................... 3
1.2 Definition of Auditing ......................................................................................................... 4
1.3 History of Auditing .............................................................................................................. 4
1.3.1 Prior to 1840;................................................................................................................. 4
1.3.2 (1840s-1920s) ................................................................................................................ 5
1.3.3 (1920s-1960s) ................................................................................................................ 5
1.3.3.1 Agency Theory ....................................................................................................... 5
1.3.3.2 Lending Credibility Theory .................................................................................... 5
1.3.4 (1990s-present) .............................................................................................................. 6
2.1 Scope of this ISA 500 (Audit Evidence).............................................................................. 8
2.2 Sources of Audit Evidence................................................................................................... 8
3.1 Due audit care .................................................................................................................... 10
3.1.1 Due professional care .................................................................................................. 10
4.1 Fair presentation................................................................................................................. 12
4.2 Consistency ........................................................................................................................ 12
4.2.1 Consistency of Accounting Policies ............................................................................ 12
5.1 Auditor Independence ........................................................................................................ 14
5.1.1 Independence comprises: ............................................................................................ 14
6.1 IFAC Code of Ethics- Fundamental Principles ................................................................. 16
6.2 Audit Threats ..................................................................................................................... 16
6.2.1 Safeguards to eliminate or reduce threats ................................................................... 16
7.1 Audit risk ........................................................................................................................... 19
7.1.1 Types of audit risk ....................................................................................................... 19
7.2 Audit Materiality & Its Types ............................................................................................ 19
7.2.1 #1 – Overall Materiality .............................................................................................. 20
7.2.2 #2 – Overall Performance Materiality......................................................................... 20
7.2.3 #3 – Specific Materiality ............................................................................................. 20
7.3 Example of Audit Materiality ............................................................................................ 20
8.1 Conclusion: ........................................................................................................................ 22
8.2 References: ......................................................................................................................... 23
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Chapter 1
Evolution of Auditing
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1.1 Introduction
Information is power in taking crucial decisions by human beings relating to their daily living,
as important as information is, it could as well be disastrous and result to the total collapse of
lives and businesses. Every stakeholder desires credible and reliable information in their
decision making and this call for checks on the records to ensure credibility. In reference the
to financial statement of corporate bodies, several users, both internal and external, are
involved; it is imperative for such information to be accurate and complete to drive consistent
decision by the users of the information (Kumar & Mohan, 2015).
The consequences of possessing unreliable information is not only detrimental to the decision
makers but also to the firm itself and the society at large; banks as a stakeholder may incur
substantial loss if it grants loan based on incredible information, employees may become
jobless, likewise other investors tends to lose their investments. In curbing information
incredibility, independent examinations of financial statements are invented by various users,
and this has been in practice since the emergence of industrial revolution till current period. It
is believed that auditing the financial statement would lead to its credibility, objectivity,
reliability, completeness, and accurate enough to guide users in making meaningful and
unbiased decision.
Every field of study including “auditing” has root which can are traceable in literature through
existence of historical records. R. G. Collingwood said, “By understanding the past, we
incorporate it into our present thought and enable ourselves by developing and criticizing it to
use that heritage for our own advancement”. Also, John R. Wildman made a statement “Each
new generation must learn for itself. But each new generation will think more intelligently if it
knows what its predecessors have thought and done”; thus mapping the history and
development of auditing can be benched on the assertion of Collingwood and Wildman
(Stettler, 1994). The need for auditing arose due to the wideness in the complexity and
interconnectivity of the society; explosive expansion of business activities and industrial
transition resulted into the emergence of auditing (Zhang, Pawlicki, McQuilken, & Titera,
2012).
Managing audit risks and the allocation of audit resources is a big problem for external auditors
(Vitalis, 2012). Audit risk is greater if the auditor fails to detect material misstatements,
intentional errors (frauds) or unintentional mistakes (human errors), since these cause the
auditor to provide a low quality audit opinion and this increase the auditor’s liabilities. In fact,
there is a reverse relationship between audit risk and audit report quality. In other words, a
lower audit risk is likely to produce higher audit quality and therefore to increase users’
confidence in the information contained in the financial statements. To achieve high audit
quality, auditors should assign a substantial amount of time, resources and alertness during all
the audit stages and procedures, from when they are engaged to perform the audit until they
issue the audit report, and should get information from internal and external sources. Auditors
should apply a holistic, risk based approach in order to decrease audit risk and increase the
reliability of their audit opinion.
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1.2 Definition of Auditing

The word “audit” comes from the Latin word “audire”, meaning “to hear”.
Audit came into existence because interested individuals or groups are unable for one or more
reasons to obtain for themselves the information or reassurance they require.
 Prof. L.R.Dicksee. “Auditing is an examination of accounting records undertaken with
a view to establish whether they correctly and completely reflect the transactions to
which they relate.
 The book "an introduction to Indian Government accounts and audit" "issued by the
Comptroller and Auditor General of India, defines audit “an instrument of financial
control. It acts as a safeguard on behalf of the proprietor (whether an individual or group
of persons) against extravagance, carelessness or fraud on the part of the proprietor's
agents or servants in the realization and of the money or other assets and it ensures on
the proprietor's behalf that the accounts maintained truly represent facts and that the
expenditure has been incurred with due regularity and propriety. The agency employed
for this purpose is called an auditor."

1.3 History of Auditing

To facilitate the examination of the historical development of auditing, this review will be
divided into the following five chronological periods:
 Prior to 1840;
 1840s-1920s;
 1920s-1960s;
 1960s-1990s; and
 1990s–present.

1.3.1 Prior to 1840;

 Generally, the early historical development of auditing is not well documented.
Auditing in the form of ancient checking activities was found in the ancient civilizations
of China, Egypt and Greece. The ancient checking activities found in Greece (around
350 B.C.) appear to be closest to the present-day auditing.
 Similar kinds of checking activities were also found in the ancient Exchequer of
England.
 When the Exchequer was established in England during the reign of Henry 1(1100-
1135), special audit officers were appointed to make sure that the state revenue and
expenditure transactions were properly accounted and the person who was responsible
for the examinations of accounts was known as the “auditor”. The aim of such
examination was to prevent fraudulent actions.
 In a nutshell, in the period pre-1840, the auditing at the time was restricted to
performing detailed verification of every transaction. The concept of testing or
sampling was not part of the auditing procedure.
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1.3.2 (1840s-1920s)
 The emergence of a “middle class” during the industrial revolution period provided the
funds for the establishment of large industrial and commercial undertakings.
 The audit objective was mainly the detection of fraud and errors.
 It can be concluded that the role of auditors during the period of 1840s-1920s was
mainly on fraud detection and the proper portrayal of the company’s solvency (or
insolvency) in the balance sheet.

1.3.3 (1920s-1960s)
 The growth of the US economy in the 1920s-1960s had caused a shift of auditing
development from the UK to the USA.
 Meanwhile, the advancement of the securities markets and credit-granting institutions
had also facilitated the development of the capital market in this period.
 The concept of materiality and sampling techniques were used in auditing during this
period
 It was not necessary to make a detailed examination of every entry, footing, and posting
during the period in order to get the substance of the value which resulted from an audit.
 In short, the social-economic condition in the period had highly influenced the
development of auditing.
 The major characteristics of the audit approach during this period, among others,
included:
 reliance on internal control of the company and sampling techniques were used;
 audit evidence was gathered through both internal and external source;
 emphasis on the truth and fairness of financial statements;
 gradually shifted to the audit of Profit and Loss Statement but Balance Sheet
remained important; and
 physical observation of external and other evidence outside the “book of
account”
1.3.3.1 Agency Theory
According to Nwachukwu, Ogundiwin and Nwaobia (2015), agency theory was first mentioned
by Berle and Means (1932) but popularized by Jensen and Meckling (1976). The theory
describes the principalagent relationship that exists between owners of the firms and the
management team that runs the firm. Scholars have argued that the theory assumes that both
parties want to maximize their own utility. Therefore, it is possible that not all the actions of
the agent are in alignment with the preferences of the principal, which is wealth maximization.
The principal wants to control the actions of the agent by monitoring the agent. These measures
of the principal leads to additional costs referred to Agency costs and incentives to the agents
which invariably reduce the company profitability (Porter et al., 2005)
1.3.3.2 Lending Credibility Theory
The lending credibility theory suggested that the primary function of the auditors is to add
value and credibility to the financial statement prepared by the management.
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According to the theory, credibility is a priceless and inestimable commodity that can be
offered by the auditor to the public. In other words, the lending credibility theory posited that
a financial statement is absolutely void and insignificantly valueless if credibility lacking. The
theory posited that credibility enhances users’ confidence in using the financial statements, it
can add value to investment decisions and that reliability of financial statements is a virtue that
every audited financial statement should possess.
Accordingly, a joint audit is being solicited based on the profile cases of the likes of Enron and
Arthur Andersen, some of the problems started when Arthur Anderson acted and played dual
roles of management in preparing the financial statement and turn back to play the role of
statutory auditor to the same financial statement, this incident led to one of the problems of
doubts to the credibility of such reports.

1.3.4 (1990s-present)
 Present-day auditing has developed into new processes that build on a business risk
perspective of their clients
 Presently, the ultimate objective of auditing is to lend credibility to financial and non-
financial information provided by management in annual reports.
 High level of litigation and criticism against the auditors observed.
 Some of the key reform activities include:
The Sarbanes-Oxley Act (The US). It outlines the rules on auditor independence, for
example, the control of audit quality, and the rotation of audit partners as well as the
prohibition of conflict-of-interest situation etc.
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Chapter 2
Audit Evidence
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2.1 Scope of this ISA 500 (Audit Evidence)

For purposes of the ISA, the following terms have the meanings attributed below:
1. Accounting records – The records of initial accounting entries and supporting records,
such as checks and records of electronic fund transfers; invoices; contracts; the general
and subsidiary ledgers, journal entries and other adjustments to the financial statements
that are not reflected in journal entries; and records such as work sheets and
spreadsheets supporting cost allocations, computations, reconciliations and
disclosures.
2. Appropriateness (of audit evidence) – The measure of the quality of audit evidence;
that is, its relevance and its reliability in providing support for the conclusions on which
the auditor’s opinion is based.
3. Audit evidence – Information used by the auditor in arriving at the conclusions on
which the auditor’s opinion is based. Audit evidence includes both information
contained in the accounting records underlying the financial statements and information
obtained from other sources.
4. Management’s expert – An individual or organization possessing expertise in a field
other than accounting or auditing, whose work in that field is used by the entity to assist
the entity in preparing the financial statements.
Sufficiency (of audit evidence) – The measure of the quantity of audit evidence. The
quantity of the audit evidence needed is affected by the auditor’s assessment of the risks of
material misstatement and also by the quality of such audit evidence.

2.2 Sources of Audit Evidence

 Some audit evidence is obtained by performing audit procedures to test the accounting
records, for example, through analysis and review, re-performing procedures followed
in the financial reporting process, and reconciling related types and applications of the
same information. Through the performance of such audit procedures, the auditor may
determine that the accounting records are internally consistent and agree to the financial
statements.
 More assurance is ordinarily obtained from consistent audit evidence obtained from
different sources or of a different nature than from items of audit evidence considered
individually. For example, corroborating information obtained from a source
independent of the entity may increase the assurance the auditor obtains from audit
evidence that is generated internally, such as evidence existing within the accounting
records, minutes of meetings, or a management representation.
 Information from sources independent of the entity that the auditor may use as audit
evidence may include confirmations from third parties, analysts’ reports, and
comparable data about competitors (benchmarking data).
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Chapter 3
Due Audit Care
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3.1 Due audit care

 Due audit care refers to the approach an auditor should have towards completing an
audit in a competent manner.
 It refers to the legal concept of a prudent person with average knowledge and average
judgment as a guide for auditors in approaching an assignment.
 It includes the considerations which should govern an auditor's performance of an audit.
 In order to ensure that auditors apply considerable due audit care in their audits, the
MIA emphasizes the requirement for Professional Competence and Due Care in its
Code of Professional Ethics.
The application of due audit care to the concepts of prudence and professional skepticism.
 A prudent auditor must be aware that management's interest is not always the same as
the auditor's interest.
 The concept of due audit care is related to the concept of a prudent person with average
knowledge and average judgment, providing some guidance to the auditor in
completing the audit.
 However, the concept of due audit care cannot be related to the concept of prudence at
all times, for example when the audit calls for the use of expert knowledge and skills.
 Auditors should plan and perform an audit with due audit care, with an attitude of
professional skepticism.
 Auditors need to have a questioning and a critical mind while assessing the audit
evidence to enhance the possibility of detecting fraud and errors.
 This approach will ensure that the auditor is able to draw appropriate conclusions at the
completion of the audit.

3.1.1 Due professional care

It implies reasonable care and competence, not infallibility or extraordinary performance. As
such, due professional care requires the internal auditor to conduct examinations and
verifications to a reasonable extent. Accordingly, internal auditors cannot give absolute
assurance that noncompliance or irregularities do not exist. Nevertheless, the possibility of
material irregularities or noncompliance need to be considered whenever an internal auditor
undertakes an internal audit assignment.
The internal auditors must exercise due professional care by considering the following:
 The extent of work needed to achieve the engagement's objectives.
 Relative complexity, materiality, or significance of matters to which assurance
procedures are applied.
 Adequacy and effectiveness of governance, risk management, and control processes.
 Probability of significant errors, fraud, or noncompliance.
 Cost of assurance in relation to potential benefits.
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Chapter 4
Fair Presentation &
Consistency
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4.1 Fair presentation

 Definition of True. True implies that the financial statements (FS) are free from
material error or misstatements. This doesn’t mean that the FS is free from all errors.
Certain errors may still exist in the statements. The auditor, when examining the
financial reports will carry out some tests especially on estimates to ensure that errors
that will distort users’ reliance on its reports are discovered and corrected.
 Definition of Fair. A financial statement is fair if it is free from undue bias. An audit
report is fair if it considers all stakeholders involved. Here, the auditor does not favor
particular stakeholders to the detriment of others. For example, the company directors
may be seeking loans from a financial institution.
 Fair presentation. The term true and fair view can be interchange with the fair
presentation if the local standards and laws permit it. In Nigeria, both terms are used by
auditors.
 “True and fair view”, also called fair presentation, can be used interchangeably. The
term suggests that auditors must give an opinion in the audit report. He or she does so
after concluding that the financial statements are free from material error and undue
bias. However, using the phrase does not mean that these statements are correct.

4.2 Consistency
The consistency principle states that, once you adopt an accounting principle or method,
continue to follow it consistently in future accounting periods. Only change an accounting
principle or method if the new version in some way improves reported financial results.
 To identify consistency matters that might affect the report, the auditor should evaluate
whether the comparability of the financial statements between periods has been
materially affected by changes in accounting principles or by material adjustments to
previously issued financial statements for the relevant periods.

4.2.1 Consistency of Accounting Policies

 If the auditor concludes that:
(a) the current period’s accounting policies are not consistently applied in relation to
opening balances in accordance with the applicable financial reporting framework; or
(b) a change in accounting policies is not appropriately accounted for or not adequately
presented or disclosed in accordance with the applicable financial reporting framework, the
auditor shall express a qualified opinion or an adverse opinion as appropriate in accordance
with ISA 705 (Revised).
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Chapter 5
Audit Independence
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5.1 Auditor Independence

Definition: Auditor independence refers to the independence of the external auditor. It is
characterized by integrity and requires the auditor to carry out his or her work freely and in an
objective manner.
 In the case of audit engagements, it is in the public interest and, therefore, required by
this Code, that members of audit teams, firms, and network firms shall be independent
of audit clients. The objective of this section is to assist firms and members of audit
teams in applying the conceptual framework approach described below to achieve and
maintain independence.
 The importance of auditor independence standards that are reasonable and yet
comprehensive, rigorous, robust, and enforceable has been underlined by several
significant corporate failures in which questions have been raised about the quality of
financial reporting and, in particular, the independence of the auditor. The Technical
Committee, therefore, encourages national and international professional accounting
bodies to continue to work with regulators to strengthen existing national and
international standards governing independence. Strengthened independence standards
that, to the extent possible within the constraints of national laws, are consistent
internationally, are a necessary element in reassuring the investing public that auditors
are in a position to exercise objective judgment in concluding on management’s
representations in an entity’s financial statements.

5.1.1 Independence comprises:

(a) Independence of Mind
 The state of mind that permits the expression of a conclusion without being affected by
influences that compromise professional judgment, thereby allowing an individual to
act with integrity and exercise objectivity and professional skepticism.
(b) Independence in Appearance
 The avoidance of facts and circumstances that are so significant that a reasonable and
informed third party would be likely to conclude, weighing all the specific facts and
circumstances, that a firm’s, or a member of the audit team’s, integrity, objectivity or
professional skepticism has been compromised.
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Chapter 6
Ethical Conduct of Audit
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6.1 IFAC Code of Ethics- Fundamental Principles

A professional accountant shall comply with the following fundamental principles:
(a) Integrity – to be straightforward and honest in all professional and business
relationships.
(b) Objectivity – to not allow bias, conflict of interest or undue influence of others to
override professional or business judgments.
(c) Professional Competence and Due Care – to maintain professional knowledge and skill
at the level required to ensure that a client or employer receives competent professional
services based on current developments in practice, legislation and techniques and act
diligently and in accordance with applicable technical and professional standards.
(d) Confidentiality – to respect the confidentiality of information acquired as a result of
professional and business relationships and, therefore, not disclose any such
information to third parties without proper and specific authority, unless there is a legal
or professional right or duty to disclose, nor use the information for the personal
advantage of the professional accountant or third parties.
(e) Professional Behavior – to comply with relevant laws and regulations and avoid any
action that discredits the profession.

6.2 Audit Threats

(a) Self-interest threat – the threat that a financial or other interest will inappropriately
influence the professional accountant’s judgment or behavior;
(b) Self-review threat – the threat that he/she will not appropriately evaluate the results of
a previous judgment made or service performed by him/her, or by another individual
within the firm or employing organization, on which the accountant will rely when
forming a judgment as part of a current service;
(c) Advocacy threat – the threat that he/she will promote a client’s or employer’s position
to the point that his/her objectivity is compromised
(d) Familiarity threat ─ the threat that due to a long or close relationship with a client or
employer, he/she will be too sympathetic or too accepting of their work
(e) Intimidation threat – the threat that he/she will be deterred from acting objectively
because of actual or perceived pressures, including attempts to exercise undue influence
over the professional accountant.

6.2.1 Safeguards to eliminate or reduce threats

 Safeguards are actions or other measures that may eliminate threats or reduce them to
an acceptable level. They fall into two broad categories:
(a) Safeguards created by the profession, legislation or regulation; and
(b) Safeguards in the work environment.
 Safeguards created by the profession, legislation or regulation include:
 Educational, training & experience requirements for entry into the profession.
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 Continuing professional development requirements.

 Corporate governance regulations.
 Professional standards.
 Professional or regulatory monitoring and disciplinary procedures.
 External review by a legally empowered third party of the reports, returns,
communications or information produced by a professional accountant.
 Work environment safeguards comprise firm-wide safeguards and engagement-
specific safeguards. Examples of firm-wide safeguards in the work environment
include:
 Leadership of the firm that stresses the importance of compliance with the
fundamental principles.
 Leadership of the firm that establishes the expectation that members of an
assurance team will act in the public interest.
 Documented internal policies and procedures requiring compliance with the
fundamental principles.
 Policies and procedures that will enable the identification of interests or
relationships between the firm or members of engagement teams and clients.
 Policies and procedures to monitor and, if necessary, manage the reliance on
revenue received from a single client.
 Using different partners and engagement teams with separate reporting lines for
the provision of non-assurance services to an assurance client.
 Policies and procedures to prohibit individuals who are not members of an
engagement team from inappropriately influencing the outcome of the
engagement.
 Timely communication of a firm’s policies and procedures, including any
changes to them, to all partners and professional staff, and appropriate training
and education on such policies and procedures.
 Designating a member of senior management to be responsible for overseeing
the adequate functioning of the firm’s quality control system.
 Advising partners and professional staff of assurance clients and related entities
from which independence is required.
 A disciplinary mechanism to promote compliance with policies and procedures.
 Published policies and procedures to encourage and empower staff to
communicate to senior levels within the firm any issue relating to compliance
with the fundamental principles that concerns them.
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Chapter 7
Audit Risk & Audit
Materiality
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7.1 Audit risk

 Audit risk is the risk that financial statements are materially incorrect, even though the
audit opinion states that there are no material misstatements.

7.1.1 Types of audit risk

 There are three components of audit risk:
 Inherent risk
 Control risk
 Detection risk
Inherent risk is the susceptibility of an assertion to misstatement that could be material,
individually or when aggregated with other misstatements, assuming that there were no
related internal controls.
Control risk is the risk that a misstatement that could occur in an assertion and that could
be material, individually or when aggregated with other misstatements, will not be
prevented or detected and corrected on a timely basis by the entity's internal control.
Detection risk is the risk that an auditor’s procedures will not detect a misstatement that
exists in an assertion that could be material, individually or when aggregated with other
misstatements.

7.2 Audit Materiality & Its Types

 Audit Materiality is an important part of audit wherein the misstatements by the
company will be considered as material in case it is likely that such misstatement will
reasonably have the influence on the economic decision of the users of the financial
statement of the company. While considering materiality both the quantitative as well
as qualitative aspects are considered. In the case of the qualitative aspects, the approach
generally is quite difficult to measure when compared with the quantitative approach.
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7.2.1 #1 – Overall Materiality

 The level which represents the significant level in the financial statements of the
company, which can influence the decision making of the users of the financial
statement of the company as a whole, as judged by the auditor appointed by the
company, is known as the “overall materiality.”

7.2.2 #2 – Overall Performance Materiality

 “Overall Performance materiality” is the materiality level judged by the auditor of the
company. It can be the amount that is less than the overall level of the materiality. This
materiality level is reduced from “overall materiality level” to consider the risk of
several smaller errors or omissions which the auditor was unable to find. But they are
material if aggregated in totality, thereby reducing the probability that the aggregate
amount of small misstatements exceeds the overall materiality level as a whole.

7.2.3 #3 – Specific Materiality

 Specific materiality refers to the materiality level set to identify potential
misstatements. These may exist in different areas in the company, for certain classes of
transactions, for the account balances that may affect the economic decisions of the
users of the financial statement of the company.

7.3 Example of Audit Materiality

 Let’s consider an example of Company XYZ Ltd, which took a loan from the bank for
$ 100,000. Bank gave the loan but on the condition that the current ratio of the
company should not fall below the level of 1.0. The company agreed to this and signed
an agreement with the bank in this aspect. Now while conducting the audit, the auditor
of the company came to know about this agreement.
 At present, the current ratio of the company is only slightly more than the level of 1.0.
Now for the auditor of the company, a minute misstatement of $ 3,000 can be material.
It could lead to a violation of the agreement between the company and the bank. With
the $ 3,000 misstatement also the current ratio of the company would fall below the
level of 1.0. So this would be considered part of the audit materiality as it could lead to
the violation of the agreement. It can reasonably influence the economic decision
making of the users of the financial statement of the company.
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Chapter 8
Conclusion & Refernces
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8.1 Conclusion:
Auditing, dated as far back as found in Ancient history and lots of reforms have been made to
its practice since then till the recent time; despite this, there are still cases of financial scandals
occurring in companies across the globe, even among firms with qualified audit reports, audited
by giants of audit (Big-4). Also, the outbreak of the global pandemic has reshaped accounting
and audit professions, and a proof that the existing system of audit process needs to be braced
up to the level of evolutions in business. Although nothing new in technologies used in
conducting an audit in recent times its full application is more required now, an audit needs to
pace with the real-time economy. Therefore, auditors may not have a choice but to adjust to
the new system. The outbreak of COVID-19 has taken businesses from the manual view to a
technology-driven, likewise the audit process (Fischer, 2020). According to Castka, Searcy,
and Fischer (2020), the use of Technologies has facilitated the transition in audit practice from
physical to remote auditing during the COVID-19 crisis. With the current situation of the
economy, accounting and audit practice should be fully technology-driven. It is imperative that
accountants ultimately lead the way in the adoption and implementation of technology-
enhanced auditing.

We determined how much audit evidence should be collected in an audit engagement if the
audit resources were allocated optimally to the audit objectives and, simultaneously, the audit
risk was reduced and the audit quality increased. We also determined the audit risk & its
different types. Further, discuss the ethical conduct of audit where different types of audit threat
are included. Finally discuss audit materially & its types.
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8.2 References:
[1] Abdel-Qader, W. (2002). An evaluation of the international auditing standards and their
application to the audit of listed corporations in Jordan. (Unpublished Doctoral Thesis,
University of Western Sydney, Australia).

[2] Abdul Ganiyy, A. (2013). Audit practice in global perspective: present and future
challenges. Research Journal of Finance and Accounting, 4(6), 1-5

[3] CPA (2020). Accounting and Auditing.

(Retrieved from https://www.cpapracticeadvisor.com/accountingaudit/news/21150910/how-

covid19 unexpectedly advanced-the-future-of-auditing on 15 October, 2020).

[4] Kumar, E. P., & Mohan, B. (2015). Origin and development of auditing. Indian Journal of
Research, 4(9), 43-46.

[5] ICAB study manual (2009). Audit & Assurance, Professional Level, Chapter 4,6,9.

[6] Stettler, H. (1994). Accounting and auditing history: Major developments in England and
the United States from ancient roots through the mid-twentieth century. Auditing Symposium,
XII, 7-44.

[7] Vitalis, A.M. (2012) Business Risk and Audit Risk: An Integrated Model with Experimental

Boundary Test, PhD thesis, University of Wisconsin, Madison.

[8] Wally J. Smieliauskas, Kathryn Bewley (2016). Auditing an international approach,

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