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Auditing

Since the big corporate fraud scandals in the early 2000s, the functioning of the auditing profession has been a topic of intense debate. This entry will provide a context for the analysis of these ongoing debates by offering a perspective on how the auditing profession developed, the value added of audit services, and the challenges the profession currently faces.

Relevance

The auditing function, that is, the function that objectively examines the truthfulness of financial and nonfinancial information, is considered to be quite old. Ross Watts and Jerold Zimmerman explain that the auditing function was already present in the 12th century, when guilds were the common organizational structure. They also note that in subsequent centuries, the auditing function anticipated the demands of the stakeholders of the audit. The ...

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