Audit subject formalization in sustainable development

• Main Author: K.P. Melnyk
• Format: Article
• Language: English
• Published: Zhytomyr Polytechnic State University 2019-12-01
• Series: Проблеми теорії та методології бухгалтерського обліку, контролю і аналізу
• Subjects: sustainable development; requests of users of information; audit; subject of audit; data formalization; assurance tasks
• Online Access: http://pbo.ztu.edu.ua/article/view/195612/195967

In the context of sustainable development, user's requests for information about the activities of business entities are expanded. As a result, the information forms in reports based on data that are grounded on a non-economic nature but are capable of influencing the activities of economic entities. This has led to the interest of information contained in non-financial reporting forms users in obtaining of assurance in its high-quality parameters. Therefore, there was a necessity to revise approaches to formalizing the subject matter of the audit, taking into account changes in the volume and content of the data to be independently audited. That’s why, the purpose of the study, the results of which are outlined in the paper, is to develop proposals for identifying and evaluating the conditions and circumstances that influence the identification of the subject of the audit and to determine the nature of such impact in the context of audit tasks. It is established that the content of information to be audited in terms of sustainable development, has changed due to the inclusion of reporting forms data relating to impact on the economic agents of environmental, social and other socially significant circumstances and the existence of the request for information not only historical but prospective nature too. On this basis, a methodological approach to formalize the subject matter of the audit as an assurance task was developed. However, the results of the study indicate that the general properties of the subject of audit in conditions of sustainable development remain mostly unchanged. These properties offer the opportunity to attribute identification, definition of critical values of the parameters of the audit subject, and – the auditor's ability to receive appropriate audit evidence. The results of the study will help to clarify the purpose and objectives of audit in the context of providing users with information about the activities of business entities, as well as to satisfy user's requests for a sufficient level of confidence in it.