THE DEMAND AND SUPPLY FOR FINANCIAL INFORMATION: THE PREREQUISITES FOR THE EVOLUTION AND DEVELOPMENT OF AUDITING AND RELEVANCE OF CONTINGENCY THEORY.
- Department of Business Administration and Marketing, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
- Department of Accounting, Babcock University, Ilishan-Remo, Ogun State, Nigeria.
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Auditing has been in existence for many thousand years back with limited usefulness before the advent of industrialization. The emergence of the industrialization expanded the business activities and resulted in the separation of the owners of the business from the control of their businesses. The ownership-control separation demands accountability from the agent through the preparation of financial statements that would provide quality financial information. This requires the third party to express his or her opinion on the truth and faithful of the financial information. The expression of third party opinion becomes complicated as the business organization environment becomes complex because both internal and external environmental factors must be considered in the expression of opinion. This study traced the evolution and development of auditing from 1700s to the present time. Pertinent literature on five stages of auditing evolution and development, the role of demand and supply for financial information in the development of the auditing, and the relevance of contingency theory in auditing were reviewed. The exploratory research design was employed in this study through the review of the relevant journal publications and textbooks pertinent to this study. The review of literature indicated that auditing job description was simple before the advent of industrialization and that auditing has gone through many changes and continues to go through changes because of the industrial revolution that started in United Kingdom and expanded to the United States of America. The conflicts of interest between the business owners and the manager called for control mechanism that would protect the business owners? interest. The review of literature also indicated that successful audit work depends on the internal and external constraints of the client?s organization and not only on the skills and expertise of the auditors. It is revealed that the usage of technology in auditing can solve some of the problems facing the auditors and any auditors who refused to embrace technology as an auditing tool may likely be out of business.
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[Soetan.Timothy Adisa, Owolabi, Sunday Ajao, Asein, Abel Aig. (2018); THE DEMAND AND SUPPLY FOR FINANCIAL INFORMATION: THE PREREQUISITES FOR THE EVOLUTION AND DEVELOPMENT OF AUDITING AND RELEVANCE OF CONTINGENCY THEORY. Int. J. of Adv. Res. 6 (Aug). 237-249] (ISSN 2320-5407). www.journalijar.com
Department of Business Administration and Marketing, Babcock University, Ilishan-Remo, Ogun State, Nigeria
