IAPS 1013 Electronic Commerce – Effect on the Audit Financial Statements:

This IAPS was issued in 2002 and this new guidance responds to the increasing use of the internet for business to consumer business to business, business to government and business to employee eCommerce and how emerging new elements of risk need to be considered when planning and performing the audit of financial statements. This new IAPS helps auditors address e-commerce issues by focusing on, among other matters the level of skills and knowledge required to understand the effect of e-commerce on the audit; the business, legal, regulatory and other risk faced buy entities engaged in e-commerce activities; internal control considerations, such as an entity’s security infrastructure and transaction integrity; and the effect of electronic on audit evidence.

 The Future of Auditing

There are many factors that are continually causing changes in the auditor's approach to his work. Some of these relate to the nature of the service that the auditor provides while others reflect external demands on the role of the auditor in society. Some have already been mentioned but are included here for completeness.

a) Changes in reporting objectives and the introduction of accounting and auditing standards;

b) The increasing complexity of the business unit, e.g. conglomerates and multinational companies;

c) The widespread use of electronic data processing and, in particular, of real time, data base systems and micro-computer systems;

d) Increased government awareness of the profession exemplified by the increasing number of accountants in the Civil Service.

e) The increased responsibility that accountants bear towards third parties, as a result of such cases as Jeb Fasteners Limited v. Marks Bloom and Co.

f) The reaction of clients to alarming increases in audit fees. This has prompted many accountants to feel that it is essential that the profession develops new ways of increasing the efficiency of audit work, and may well lead to greater use of statistical and other analytical review techniques.

g) Increased public awareness and criticism of the auditing profession, resulting in the Ethical Guidelines.

h) The development of public sector auditing beyond the traditional role of reporting on financial statements in terms of truth and fairness, into the realms of measuring economy, efficiency and effectiveness of an entity - so called 'value for money' auditing.