After consideration of the academic theories of auditing, the views expressed in the Brydon Report and the definitions in the ISAs, particularly ISA(UK)200, consider what the purpose of audit is in the twenty-first century.

Discussion

– Is it to preserve public confidence in a company and its management, or is it simply to attest to the validity of a set of financial accounts? Does it have a wider public interest function?
– What if the financial statements reveal that the board of directors is a set of incompetent individuals? Or engaged in a massive fraud? If this undermines confidence in the company the effect on other stakeholders could be extreme in terms of jobs and livelihoods – is that part of the auditor’s remit?
– If so, how should the audit process reflect that? Should financial statements continue to be expressed in complicated language that only accountants really understand the significance of?