Essentially there are four different audit approaches: the substantive procedures approach the balance sheet approach the systems-based approach the risk-based approach.
This is also referred to as the vouching approach or the direct verification approach..
An auditing theory should describe these activities and their particular con- figurations and intensities.
It should explain using differing relative amounts of substantive and compliance testing and differences in the amount of resources used to audit a public versus a private entity..
Economic Theory of Auditing: This theory views auditing as an investment decision that provides information to decision makers to reduce the uncertainty surrounding financial statements.
This theory focuses on the costs and benefits of auditing and the value that auditing provides to stakeholders..
Agency theory contends that internal auditing, in common with other intervention mechanisms like financial reporting and external audit, helps to maintain cost‐efficient contracting between owners and managers.
A proposed agency theory framework for internal auditing research is outlined in Table I..
“Audit is defined as an investigation of some statements of figures involving examination of certain. evidence, so as to enable an auditor to make a report on the statement.” – Taylor and Perry..
• An audit is a systematic process of objectively obtaining and evaluating evidence. regarding assertions about economic actions and events to ascertain the degree of. correspondence between these assertions and established criteria and communicating the. results to interested users. (.
Auditing Theory gives new insights into the nature of materiality, evi- dence, professional judgement and scepticism in auditing.
This is achieved through the method of conceptual enquiry, conceived as a particular kind of philosophical investigation that is explained in the book, into the concepts of auditing..
In the literature in the field, the most known and used work is that of Mautz and Sharaf (1961) in which the authors conceive the auditing as a field of knowledge built on a central core, considered as being abstract including mathematics, logic and even metaphysics, because Auditing has its roots in logic..
An auditing theory should describe these activities and their particular con- figurations and intensities.
It should explain using differing relative amounts of substantive and compliance testing and differences in the amount of resources used to audit a public versus a private entity..
Risk based is the most used approach.
The objective is to reduce audit risks and do fewer works.
Auditor requires to perform risk assessments to make sure that all possible risks of misstatements are identified.
Risks based approach performs by understanding the client's business, environments and internal control..
Auditing is generally considered to be a particularly practical discipline
This hampers theoretical research, as does its complex nature
The unquestioning acceptance and implementation of rules governing auditing practice could lead to poor outcomes
This book provides a theory of auditing that underpins auditing practice
Auditing: A Journal of Practice & Theory contributes to improving the practice and theory of auditing and encompasses internal and external auditing as well as other attestation activities (phenomena)
The objectives were to highlight the relevant theories that underpin the existence of auditing and the hypotheses that underlined the auditing role
Five auditing theories were found to underpin the very existence of auditing, which are: the policeman theory, credibility theory,rational expectationtheory, agency theory and signalling theory
Attributing events to secret plots instead of more probable explanation
A conspiracy theory is an explanation for an event or situation that asserts the existence of a conspiracy by powerful and sinister groups
Often political in motivation
When other explanations are more probable.The term generally has a negative connotation
Implying that the appeal of a conspiracy theory is based in prejudice
Emotional convictionOr insufficient evidence.A conspiracy theory is distinct from a conspiracy; it refers to a hypothesized conspiracy with specific characteristics
Including :But not limited to opposition to the mainstream consensus among those who are qualified to evaluate its accuracy
Pseudoscientific belief that germs do not cause disease
Germ theory denialism is the pseudoscientific belief that germs do not cause infectious disease
And that the germ theory of disease is wrong.It usually involves arguing that Louis Pasteur's model of infectious disease was wrong
And that Antoine Béchamp's was right.In fact
Its origins are rooted in Béchamp's empirically disproven theory of pleomorphism.Another obsolete variation is known as terrain theory and postulates that the state of the internal environment determines if germs cause disease rather than germs being the sole cause of it.
Qualitative research methodology
Grounded theory is a systematic methodology that has been largely applied to qualitative research conducted by social scientists.The methodology involves the construction of hypotheses and theories through the collecting and analysis of data.Grounded theory involves the application of inductive reasoning.The methodology contrasts with the hypothetico-deductive model used in traditional scientific research.
Conspiracy theory involving purported reptilian humanoids
Reptilians are supposed reptilian humanoids
Which play a prominent role in fantasy
And conspiracy theories.The idea of reptilians was popularised by David Icke
A conspiracy theorist who claims shapeshifting reptilian aliens control Earth by taking on human form and gaining political power to manipulate human societies.Icke has stated on multiple occasions that many world leaders are
Management and ethical theory that considers multiple constituencies
The stakeholder theory is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities like employees
And others.It addresses morals and values in managing an organization
Such as :Those related to corporate social responsibility
Market economyAnd social contract theory.
