The Joint Stock Company Act Of 1844

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1. As it is commonly held that the Judiciary is the last hope of the common man, so is the Auditor the main thrust of the investor. There is however expectation gaps when professional services are rendered. This is either created by wrong perception of the role of the professionals by the public or poor rendering of services by professionals, which creates room for erosion of trust or criticisms. With the advent of industrial revolutions in the UK towards the end of the 19th century, Auditing grew from mere listening as was practiced in ancient civilization like Greece to a “conformance role”. According to Brown (1962), the time became ripe for the practice of auditing at this time because of the losses suffered by investors. People…show more content…
There was the need for investors’ confidence in the businesses which they invested in, especially as ownership became separated from management creating the need for auditing. The audit function was mainly to provide credibility to the financial Statements prepared by company managers for their shareholders (Heang and Ali 2008). The general consensus achieved the primary objective of an audit function is to add credibility to the financial statement rather than on the detection of fraud and errors. This change in audit objective is evident in the successive edition of Montgomery’s Auditing text issued during this period which stated “An incidental, but nevertheless important, objective of an audit is detection of fraud.” (1934, p. 26). “Primary responsibility…for the control and discovery of irregularities necessarily lies with management.” (1940, p. 13). Hence, it can be witnessed that the shift of the focus of an audit function from preventing and detecting fraud and error towards assessing the truth and fairness of the companies’ financial statements began at this period (Heang and Ali 2008). This development, which “absolves” the Auditor from the responsibility of Fraud and error detection, became one of the lacunas in the principles governing how Auditors should conduct their affairs. Giving an opinion on
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