Coping Mechanisms

We have now noticed that audit reports internationally are varied in their info content. We've also documented variations within the platforms that help to give the attest function credibility. These differences help the case for powerful international harmonization efforts in auditing. A top organization that has as its mission the harmonization of global auditing standards is the International Federation of Accountants (IFAC). At the same time, differences in audit circumstances described in the previous sections, especially within the region of independence standards and audit standards that are anchored to legal systems, recommend that global harmonization efforts will not be simple.
The European Community is also pursuing harmonization of audit standards at the regional level. This effort, nevertheless, is difficult by the diversity that characterizes organizational structures from the accounting profession in many EU nations. For example, the United Kingdom currently has six accounting bodies 4 of which have ministerial approval to serve as statutory auditors. France has two accountancy bodies when Germany has three. This diverse range of acounting structures makes it pretty challenging to secure agreement within the audit region. Suffice it to say that tangible progress toward harmonized auditing standards in Europe has been slow. In the absence of harmonized audit standards, economic analysts should make it a point to know the audit circumstances that exist within the nation that hosts the business enterprise entity whose financial statements are below scrutiny. Failing this, restricting economic analyses to those companies whose statements happen to be audited by trustworthy audit firms known for their skilled expertise and integrity is one coping option. If the stakes are sufficiently high, as they are for institutional investors, insisting on or paying for a second audit opinion by a world-class international audit firm is an additional.