Evaluating the Effectiveness of the Analytical Tools of the Jordanian Audit Bureau in Detecting Accounting



Evaluating the Effectiveness of the Analytical Tools of the Jordanian Audit Bureau in Detecting Accounting

Introduction

Audit is the examination undertaken by the auditors that the information provided is fairly stated or not (Loughran, 2010). The rampant growth and augmenting uncertainty in the business environment has evolved a massive business risk and to cure it, auditing has become the necessity around the globe (Soltani, 2007). It has been significantly important for the stakeholders to know about the business, the practices they do, the transactions they are involved in, their present and future vision, etc. Such information is usually provided in the form of financial statements and the financial statement audit is thereby conducted to ensure the fair statement of such statements.

Audited financials are not only mere commitment of costs to the business but conducting a financial statement audit has its advantages too. The audit financials are required for the business to be able to borrow money usually; the credibility of the business is bolstered and thereby, attracts a larger pool of the investors, and aids the business to gain the confidence of the target market and the general public (Wallace, 1991). In order to conduct the financial statement audit, auditors use variety of the tools and techniques to accomplish the task. These tools and techniques provide various benefits to the auditors and act as an audit evidence for the auditors to issue an unqualified or qualified report.

The document entails the discussion about the audit bureau of Jordan, the audit tools and techniques, the effectiveness of the tools and techniques used by the Jordan Audit Bureau.

Audit Bureau of Jordan

Jordanian Audit Bureau is the supreme audit institution and acts as an independent agency to the Government of Jordan. The Audit Bureau of Jordan is held by the Government of Jordan i.e. it has more than fifty percent (50%) shareholding and Bureau can audit accounts of any entity in the Cabinet of Jordan. Basically, the Jordanian Audit Bureau is responsible for the audit of public departments, ministries, corporations, public departments, co-operatives, municipalities, and labor unions.

The Jordanian Audit Bureau has been evolved with the heightened efforts made by the various Jordan authorities over the period of time. The Bureau was established in the year of 1952, under the 1952's Law of Audit Bureau. In line with the Jordan Constitution, the Bureau is empowered to audit the expenditures and revenues of the state and methods through which they incur expenditures.

The responsibility, which is now allocated to the Jordanian Audit Bureau, has been through various amendments and stages. Such transfer of responsibility over the period of time has been correlated with the changes in the economical, political and legislative conditions in the country of Jordan.

Brief Historical Developments

First of all, the responsibility to conduct the audit was initially assigned to the Accounts Review Department, which was established in the January, 1928. The department was constituted by the Emirate of ...