The Role of the Auditors

RAMIREZ, JOHN REYMUND B.

BSAc – 5B

Acctg 416 – B

Reflection Paper No. 1

09 July 2018

THE ROLE OF THE AUDITORS: AN INTROSPECTIVE ANALYSIS ON THE EVOLUTION AND SIGNIFICANCE IN THE SOCIETY

Through the years, the role of the auditors has radically changed. It can be inferred that these transitions in the practice of the auditing profession can be rooted from the (1) several controversies and scandals in the business and corporate arena and the (2) dynamic nature of the market, business and the environment. The Enron Corporation and WorldCom Inc.’s demise, amongst all the accounting reproaches in the 21st century, were considered as the major set off for a new and revolutionized auditing model paving its way to the enactment of the Sarbanes–Oxley Act of 2002, also known as "Public Company Accounting Reform and Investor Protection Act", named after Sen. Paul Sarbanes and Rep. Michael G. Oxley who introduced the said act. Further, the advancement and introduction of more complex technology, the shift from the industrial revolution to information age amid states and economies and the diminution of the traditional communication to a more inclusive and efficient spectrum were auxiliaries that brought the auditing practice to its more contemporary sense. That being said, the preferences and need of the stakeholders or users of the financial statements having been audited by independent and accredited auditors have been constantly redefined every after company scandals and economic, market or industry flux.  However, amidst the move towards a more generally acceptable audit practice, one [as a person whose knowledge of interest is accounting and auditing] can still say that the scope of the audit profession and the role of the auditors in this modern-day era are, at the very least, lacking.  

REFERENCES

American Association of Certified Public Accountants. (2012, November). Evolution of auditing: From the traditional approach to the future [PDF]. Retrieved from https://www.aicpa.org/content/dam/aicpa/interestareas/frc/assuranceadvisoryservices/downloadabledocuments/whitepaper-evolution-of-auditing.pdf

Sarbanes-Oxley Act of 2002 [PDF]. Retrieved from https://pcaobus.org/About/History/Documents/PDFs/Sarbanes_Oxley_Act_of_2002.pdf

The Economist. (2014, December 11). Accounting scandals: The dozy watchdogs. Retrieved from https://www.economist.com/briefing/2014/12/11/the-dozy-watchdogs