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Hello tutor,
I have a question. I will be greatful if you could help me to better understand this question.
The question is ‘ an audit would be effective if it is pro-active instead of being re-active’.
Discuss the above statement.
Thanks for your help.
Well, that isn’t an F8 question. Looks like a poor academic question that someone has set for you.
I don’t really understand it either. If it’s trying to say that auditors only react to problems in the FS, I don’t think that’s true. They do, of course, react to such problems, but they also collect sufficient appropriate audit evidence and that process is proactive and they write management letters to clients to point out internal control weaknesses and suggest improvements.
I don’t think that auditors can begin to take part in the client’s management such as give advice on products or marketing. First, that would interfere with their independence and second auditors cannot be expected to have expertise in managing all manner of clients and their businesses.
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