A new approach to audit

Publié le 08/13/2008

This leaflet explains why audit approaches should be reviewed for all companies and not only listed ones submitted to section 404 of SOX. The reasoning for this is that accounting standards, so far, may hide basic phenomenons and among the criticized ones is the "Fair Market Value" of US GAAP n°157 (or n°39 of IFRS). This text was written before the financial crisis and appears now as prophetic. It recommends that practiced audits processes (US GAAS or ISA's) go back to the basics as they are already set for. They should be focused and the reports should be representing how the reporting system is organized and operated in order to ensure that all transactions are going into it, whether the processing of the resulting data is secure and consistently restitutes this data, whether the accounting aggregates are sensible for management and meaningful from a business standpoint before referring to any accounting standard, and finally, whether the bridges to financials are correct enough to have financials compliant to the chosen accounting standards or any applicable or requested reporting formats by authorities. The text reminds us what the hierarchy of duties to be fulfilled by auditors should be. The innovation is that efficiency in terms of use and quality comes before compliancy like principles should come before rules. It explicitely states that accounting standards are just a language and have never any universality. They will like the Fair Market Value become wrong at a time and that audits should not rely on them to get appropriateness.
You can download the document in English and also in French.

Où sommes-nous?

Nous sommmes présents
aux Etats-Unis, en Europe et en Asie.