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To use your DAB analogy each preset would these days have a broad range of frequencies over which it could be received.
The difficulties re audit in the past, in my day ,used to mainly revolve around completeness, with some measurement issues, but the measurement issues were far more limited than today.
Whilst no longer doing any audit work it now appears to me the issue is far more subjectivity re measurement brought about by the complexities of modern business practices, organisations and financial products.
Now part of the issue appears to me to be due to the rules based complexity of current financial reporting standards and frankly castigating the auditing profession for playing catch up does at time seem to be beating the watchdog (not bloodhound) when the owner has failed to make it clear at times what the dog ought to be doing.
Thanks for a thought provoking article. I like the comparison to the DAB radio - certainly food for thought.
I hate the way the FRC couches this in terms of "quality". The problem is "integrity." The problem is not a technical one. It's a fundamental human issue - you cannot buy integrity. If you challenge management too much they will find someone else. When your career is assessed (in reality, despite all the HR guff) pretty much exclusively on fee income billed, who would take that risk with their career?
Materiality is a fundamental exercise in self deception -
an excuse to look the other way for misstatements stakeholders would certainly consider material.
I'd like to know how many AWebers agree with my proposition: anyone carrying out audit with integrity will never make partner.
One particular area that definitely needs attention in auditing is that of tax liabilities. As far as I can see next to nothing is done in audits to establish that there are no additional PAYE or NIC liabilities, with results that are all too predictable. I am dealing with an employment status case at the moment where an arrangement has been left untouched that was set up 37 years ago, and the big firm that has done the audit has never looked at it since. As it involves one of the company's directors the amounts being claimed by HMRC are definitely material.