New trends in the international professional regulations pertaining to external audit organisations

Incessant global changes and the subsequent competitiveness challenges force audit institutions assume newer and newer tasks on a regular basis. As a result of ever-widening international cooperation financial audits cross the national borders, wherefore – corresponding to the globalisation process – a gradual standardisation process has started in this field too, which is universal in terms of the basic principles, yet preserves the values of the national practices. An important precondition for standardisation is that the activities of the audit organisations should be harmonisable and linkable with one another. This goal is served by the coordination of the audit techniques, methods and procedures, the establishment of international standards, as well as the application and further development thereof. Said process is coordinated and encouraged by the International Organisation of Supreme Audit Institutions (INTOSAI), which integrates the supreme national or state audit organisations, and coordinates the professional development thereof – today increasingly in conjunction with the International Federation of Accountants (IFAC). The new expectations to be set against the new situations are primarily mediated by the regulatory systems, within which – in addition to legal regulations – the periodic renewal of professional regulations comes up as a key issue. The legal regulations primarily answer the questions “what?” or “why?”, which are necessary but not sufficient preconditions. In contrast with this, the professional regulations also deal with the problems of “how, with what methods?”, with standard solutions – methodologies – in the centre. Within the professional regulatory system the professional standards of auditing are currently linked to fundamental terms such as materiality, risk, sampling, assurance, etc., which appear as the main threads of quality in this respect. The standards are not legal regulations, since they are based on the principle of voluntary adherence, however, they clearly indicate the expected quality level. Apart from this, during the audits the professional standards are used as a benchmark, or measurement tool, wherefore they must be considered as indispensable elements in the audit quality management systems, too. Apart from the general standards, the guarantee values of the national economy and public finances, such as the transparency and accountability of the utilisation of public funds, the enforcement of which requires the consistently good quality of the audit activity, have by today become key factors. It results from all this that it is impossible to develop and operate the quality management systems of external audit organisations without the continuous modernisation of the professional (methodological) regulation of audits. The following is an attempt to identify the global professional processes that have been increasingly taking shape in the past years, as well as to identify the possible directions of development, with special regard to the professional regulatory tasks that can currently be set for the State Audit Office, the external audit institution of Hungary. However, when keeping track of the international trends it is unavoidable to systemically review the professional audit documents produced in the past years, which are continuously accessible on INTOSAI's website and which form the number one subject of this study.