An investigation into the audit exemption and developments in the auditing sector

摘要

With the audit exemption thresholds rising in 2006, this poses the question whether it will udhave impact on the auditing sector. Presently there is a lot of interest in this area, with the udInstitute of Chartered Accountants in England and Wales (ICAEW) in the United udKingdom (UK) launching a consultation exercise on the impact the audit exemption has udhad on their auditing sector. While the United States (US) has gone under major udrestructuring to its auditing sector, due to the income from auditing diminishing and the udprofession had to alter its products. ud udTherefore, this research explores the development of the audit exemption, and the udevolution and progression of the auditing sector. The purpose of this research is to uddetermine why the audit exemption was established and to investigate its impact on the udauditing industry. It also investigates if the auditing sector has developed alternatives udservices that could be provided to the public. The researcher did an extensive literature udsearch on the area audit exemption and sent questionnaires the top twenty accounting udfirms. The researcher also interviewed the three Irish accounting bodies to discover their udviews on the area. ud udThe literature shows there is a shift in the activities being performed by auditors udinternationally. Professional bodies have responded to the changing environment by udupdating the professional practices framework and expanding the skills and knowledge udrequired to provide assurance in the future. The research has found that more than 50 udpercent of respondents felt an impact from the recent rise in audit thresholds, with 40 udpercent of respondents revenue decreasing and 50 percent saying it had decreased the udnumber of audits performed by them. This research has also identified a clear gap for udproviding alternative services to the audit, such as assurance services, with 90 percent of udrespondents feeling they could be provided in Ireland. However, the demand for the udservices was highlighted as a concern by the accounting bodies. In conclusion, the top udtwenty accounting bodies have felt an impact by the recent rise in the audit exemption udthresholds, and this research has identified potential alternative services.