Social Benefits of Audit

2171 Words Jan 19th, 2011 9 Pages
Introduction:
Audit emerges because society needed. Auditing has been a regular feature of organized human activity from the earliest times. Indeed evidence suggests that formal audit procedures existed in the economic activities of the most of the early civilization. With the advancement of development, audit emerges as a separate discipline & contributes to the economic & social advancement. Audits serve a vital economic purpose and play an important role in serving the public interest to strengthen accountability and reinforce trust and confidence in financial reporting. As such, audits help enhance economic prosperity, expanding the variety, number and value of transactions that people are prepared to enter into. However, in recent
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If some people are left behind, or indeed made worse-off, by policies aimed at maximizing national output, then it is assumed that ‘winners’ can compensate ‘losers’, for instance via taxation and public expenditure ( though these instruments must be used in a way that minimizes so-called ‘distortions’). This might be described as a strategy of ‘first maximize the size of the pie, then hope that it will be sliced up in such a way that nobody is made worse off’. Note that this approach is indifferent as to whether the losers are people who are already very rich, or very poor. Each is equally deserving of compensation. Nor does it pay much attention to the likelihood of compensation actually taking place. If the policy measures are expected to produce the maximum possible extra output, then auditor will express opinion that is enough for them to be judged ‘optimal’.
States enjoy a margin of discretion in selecting the means to carry out their obligations. However, in discharging their obligations for the realization of economic and social rights, states must pay regard to the following key points: the requirement for progressive realization; the use of maximum available resources; the avoidance of retrogression; the satisfaction of minimum essential levels of economic and social rights; non-discrimination and equality; and participation, transparency and accountability. These principles can be used