This chapter covers the regulatory framework within which the external auditor operates and how the auditing profession is regulated. It is important that you understand the rights and duties the auditor has and also the specific processes that must by followed when auditors are appointed, removed and resign.
There are several bodies which govern auditing and financial reporting and it is essential that you understand the role of the International Auditing and Assurance Standards Board and how International Standards on Auditing are set.
Note that:
- The audit is primarily a statutory concept which means that an audit is required by statute(law) and the majority of companies are required by national law to have an audit.
- Unless otherwise stated, companies in the AA exam will require an audit.
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