RELEVANCE OF IAS / IFRS TO AUDITING
The auditors should involve in their report that their view on whether the financial statements they report are true and fair view. It is commonly felt that in order for accounts to display a true and fair view there should be compliance with the IAS / IFRS. There might be conditions where compliance with IAS / IFRS might outcome in a true and fair view not being given though this is rare. Therefore effectively, the auditor is being requested to give an opinion on whether all the IAS / IFRS have been complied with in the preparation of the accounts he is auditing. The auditor hence should know and recognize the IAS / IFRS in detail. The auditing students are also likely to know the IAS / IFRS in detail since invariably, there will be an examination question which needs this knowledge and students are recommended to quote from the IAS / IFRS and state which of the IAS / IFRS is appropriate to their answer.
International Financial Reporting Standards are planned to be applied to all financial statements that show a true and fair view. They set out the main suppositions underlying statements and they prescribe that accounting policy must be employed when more than one is possible. They also identify disclosure needs in many regions involving the disclosure of accounting policies. Again they are not planned to be a comprehensive code of firm rules. It is familiar that such a code adequately elaborates to cater for all business condition and circumstances and for every extraordinary and marginal case is not possible. The advantages of IAS / IFRS are as follows:
1. They lead to a degree of regularity and comparability amongst accounts.
2. They support understanding by given that readers of the accounts bigger information concerning the preparations of the accounts.
3. They support accountants and auditors by helping in the procedure of determining what a true and fair vision is. They hence aid refines the meaning of true and fair view.
4. They explain a technique of accounting and or disclosure necessity approved by the institute.
5. Members of the institute are grateful to secure obedience to IAS / IFRS whenever they are anxious with financial statements, accountants, directors, company secretaries, auditors or in any other role.