Sophisticated accounting

Over the last few decades, audit firms have been led down a path of compliance above all else, and, especially small firms, have insisted on holding on to their traditional methods and approach to auditing to limit the risk of making a mistake when interpreting auditing standards. The risk and internal control standard, ISA315, is highly confusing, and the latest amendments have only added to the confusion. Therefore, firms, some of them not so small, have insisted on always using the substantive approach in auditing, regardless of the state of controls and the business model in the entity.

With advanced technology comes advanced sophisticated accounting, and accounting methods which used to be too complex to apply on a large scale are now being applied, with auditors being put on the back foot, as some accounting methods, such as standard costing, have been avoided, due to their complexity.

Audit firms need to upgrade their resources, in order to apply sophisticated audit procedures such as data analysis and control-based audit approaches. The business landscape does not lend itself to traditional audit procedures. As yet, however, the standards do not adequately address the sophisticated accounting methods being applied.

Upcoming Events

Audit Induction Training – Managers Day 1

February 2 @ 8:00 am - 4:00 pm SAST

Audit Induction Training – Managers Day 2

February 3 @ 8:00 am - 4:00 pm SAST