The Extent of the Auditing Profession’s Contribution to the Rationalization of Accounting Practices and Its Impact on Financial Reporting Quality

Abstract

The auditing profession’s objectives and procedures have historically evolved under multiple factors, notably its interaction with accounting practices to meet stakeholders’ needs in financial reporting. This evolution has passed through three phases: natural development, regulatory legislation leading to internationalization, and politicization, shaped by economic, social, political, and technological changes.

Accounting practices have adapted accordingly. Findings from the survey of academics and practitioners reveal that auditing plays a pivotal role in guiding and improving accounting practices, with a strong and significant relationship between auditing practices and financial reporting quality. Auditing has thus moved beyond error detection to enhance transparency and credibility in financial information.

The study recommends balancing local regulation with international standards, particularly in developing economies, to prevent politically driven global influences from undermining the organization of auditing and accounting professions and threatening economic development.