International Standards on Auditing: A Brief Explanation

Like any other activity related to such an important sphere of life of any enterprise as its financial condition, the audit must be strictly regulated in order to exclude the possibility of poor quality audit. It is also important that today, in the century of rapid globalization and internationalization of the economic life of the whole world, in all countries, audits were conducted in the same way. This is especially important for transnational corporations, which consist of many branches scattered around the world. Precisely in order to unify the audit process , and international auditing standards were adopted

What are they? International standards for auditing are special documents that contain the requirements for conducting inspections of the financial condition of enterprises. These standards are issued by the international federation of accountants, and are widely used all over the world. First of all, the most famous and large users of ISA are representatives of the so-called "Big Four", which includes the companies "Ernst & Young", "PricewaterHouseCoopers", "KPI-GM" and "Deloitte." Since these audit firms are transnational companies, in their activities they take for the basic guidance to the action the international audit standards.

However, it is worth noting that the ISA is used not only by representatives of the Big Four. The fact is that international and national audit standards are closely related, and most countries create their own standards with international experience in mind. This allows even more unified inspections and provide the most standardized audit anywhere in the world.

Classification of the international standards of audit is a division of them into certain categories according to a certain attribute of classification. Usually there is only one sign in the classification - the logical stage of the audit, which one or another standard concerns. That is why the international audit standards are divided into the following categories:

- Introductory aspects - give an idea of the conceptual basis of the audit and the conduct of the audit;

- Obligations - disclose all the duties of the auditor to the customer, regulate the conclusion of contracts to conduct the audit, draw attention to the inadmissibility of disclosure by the auditor of information received in the client's firm;

- Planning - international audit standards of this category provide an idea of the drafting of an audit plan, taking into account risks, materiality and some other points important in planning the audit ;

- Internal control system - explains how to analyze the accounting system and internal control of the firm.

- Audit evidence - international audit standards related to evidence are among the most important, since they regulate which documents can be accepted by the auditor as evidence of an operation, and are ranked according to the degree of reliability;

- Use of third-party services - explain in which cases the auditor is entitled (or even obliged) to resort to help from unauthorized persons while conducting the audit;

- The audit report and conclusions - regulate the mandatory items and types of audit findings, which will be presented after the audit is completed by the management of the enterprise;

- Specialized areas of audit - provide information on inspections in highly specialized areas;

- Related services - regulate the list of additional services that an audit firm can provide.