A Practical Guide to Auditing and Related Terms

Citation

Vinten, G. (2005), "A Practical Guide to Auditing and Related Terms", Managerial Auditing Journal, Vol. 20 No. 2, pp. 208-209. https://doi.org/10.1108/02686900510574610

Lal has been at it again. This indefatigable audit specialist has produced yet another worthy publication. How does he do it? There is comprehensive coverage with over 1,700 terms and phrases used throughout auditing, from external and internal to information systems, fraud, and operational. They have been drawn from a variety of disciplines, and this is the first ever publication of its genre. Landmark frauds, such as BCCI, Barings, EFC, Bre‐X, Enron, and WorldCom are included, but Ahold and Parmalat are missing.

Included are terms from accounting, finance, management, law, mathematics, statistics, quantitative techniques, information technology, fraud investigations, communications, manufacturing, purchasing, and other fields. Also, drawing on Lal's work on intercultural differences, he includes terms used in a smattering of other countries to ameliorate slightly the otherwise North American bias of the guide. I would have welcomed an explanation on methodology including the criteria for inclusion or exclusion. Although it is said to be in dictionary format, its title is as a “guide” and one wonders what the difference is.

Several terms may have semi‐official definitions within Standards or the law, and where there are authoritative sources such as this, it would be good to be acquainted with them. One is never quite sure how the definitions are derived, and hence how much reliability to place on them. The materiality definitions are not necessarily as full as they could be, and examples would assist. The definition of whistleblowing is of the narrow variety, and is too vague, and is not one which would be considered adequate in a law court. It is also implied that the IIA has only recently concocted a statement on the subject, whereas the first ever statement was as far back as 1988.

It is a high task to achieve the objectives, and information technology has been the most difficult one of all, since a whole publication could have been devoted to this on its own. The coverage of this area is a bit thin on the ground and selective, although important developments like XBRL and the related XML receive a paragraph of treatment, which is more than the two or three lines, accorded many entries throughout. The .zip suffix is explained, but other suffixes are not. Appendices include:

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  A listing of over 230 recognized regulatory and professional organizations in 120 countries with designations they grant, plus contact details.

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  Auditing and accounting standards and guidance.

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  Select websites, journal articles, and books for further reference. It might have helped here to indicate the main specialist journals to which interested readers could resort.

There are errors and omissions. The designation of the Chartered Institute of Public Finance and Accountancy of the UK has been CPFA for many years now. It is also worth mentioning that CIPFA has a Diploma in Public Audit. The Cadbury Report was certainly not the initiator of the term “corporate governance”, which pre‐dates it by several decades, and neither was it set up by Cadbury‐Schweppes. This is the sort of amusing misconception that one expects to read in a student assignment. Had reference been made to the report, section 2.1 would have revealed that “The Committee was set up in May 1991 by the Financial Reporting Council, the London Stock Exchange and the accountancy profession”. On omissions, there is no mention, for example, of expectations gap or of stakeholding, both terms of importance. One wonders if the guide would have benefitted from a slightly longer period of gestation, and if there was an urge to be published which overcame a sensible exposure and review period.

Nevertheless, the publication already has value in itself, and one is sure that Lal will continue working on it and updating it in his constant strive towards perfection.