Why is international harmonization of auditing standards important?

Question

Quizplus · Accepted Answer

International harmonization of auditing standards is important to assure international capital markets that auditing is consistent across companies. This promotes trust and confidence in financial reporting, which is essential for global investment and economic growth. Consistency in auditing also helps to prevent fraudulent activities and financial misstatements.

Option A is incorrect because harmonization with international accounting standards is important for the preparation of financial statements, not auditing.

Option B is incorrect because the independence of external auditors is ensured through regulations and ethical standards, not harmonization of auditing standards.

Option D is incorrect because although international harmonization of auditing standards may reduce the authority of individual governments, this is not the primary reason for its importance.

Why Is International Harmonization of Auditing Standards Important