What is it about?

In view recent developments which have resulted in the replacement of attributes of relevance and reliability with a new categorization of fundamental qualitative characteristics of accounting information and enhancing qualitative characteristics of accounting information, this chapter is aimed at highlighting why the roles of audits – and particularly accountants and auditors still serve as fundamental, vital and crucial means of verifying financial statements – such that these can be reasonably relied upon by investors in financial and capital markets.........

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Why is it important?

This is important from the perspective of ensuring a sufficient degree of accountability exists in facilitating independent in the work of the auditor whilst ensuring that economies of scale are preserved whereby a firm is able to maximise the implementation and acquisition of the skills and expertise which have been gained over the years in certain audit engagements.

Perspectives

The need to ensure that mandatory audit rotation is undertaken - such that the independence which is required in effectively executing the auditor's tasks are not impaired whilst considering the need for cost effectiveness and also the need to retain expertise and valuable skills which has been acquired within the firm over the years. Objectivity and independence being essential to facilitate appropriate analyses, judgment, reasoning competences which are required of the auditor - particularly at strategic levels of management. Whilst a role exists for Artificial Intelligence in matters requiring forward looking statements and regression analysis, certain strategic functions and human competences such as high levels of reasoning and judgment cannot be undertaken by automation where balanced with skills and expertise of a competent, independent and objective functioning auditor.

Prof Marianne Ojo
Northwestern University

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This page is a summary of: Fundamental or Enhancing Roles?, January 2017, IGI Global,
DOI: 10.4018/978-1-5225-1900-3.ch004.
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