Why is international harmonization of auditing standards important?

Question

Quizplus · Accepted Answer

International harmonization of auditing standards is important because it assures international capital markets that the auditing of financial statements has been consistent across companies. This promotes transparency and trust in financial reporting, which in turn enhances investor confidence and supports the stability of global financial markets. Harmonization also helps to reduce the regulatory burden on multinational companies by providing consistent guidelines that can be applied across jurisdictions. While being consistent with harmonized international accounting standards is important, it is not the main reason why international harmonization of auditing standards is necessary. Ensuring the independence of external auditors and reducing the authority of individual governments to enact accounting laws are also important goals, but they do not capture the broader benefits of international harmonization for global financial markets.

Why Is International Harmonization of Auditing Standards Important