A Description of the Historical Developments in Standard Setting and Regulations for Auditors and the Audit Firms in an International Perspective
The profession of auditor in its current form has its starting point approximately 130 years ago. That being said, ever since people have been administering other people's assets, there has been a need for supervision of this administration and auditing of the accounts regarding this administration. Only after the industrial revolution, auditor became a separate profession, in some cases as a "spin off" of another profession. The position of the auditor has always been different in various countries. In some countries, the emphasis lay solely on the audit, whereas in others there were also important supervisory aspects to the function. Regulation has sometimes had the function to support the development of the profession, on other occasions it was rather a reaction to (perceived) abuse concerning financial reporting. During the 1980s, the profession of auditor was one of the first professions to internationalize and later globalize following the business world. Regulations that touch the core of the activities that auditors are concerned with: company law, securities law and the professional audit regulations were and are in general organized on a local and sometimes regional level. This has caused and still causes all kinds of problems in the coordination of the audits in various jurisdictions, the findings of which have often to be communicated to users in other jurisdictions. Particularly in the last decade, the rules and regulations for the audit profession have exploded. This is for an important part caused by the domination of Anglo Saxon views on the profession during the last decades. In order to comprehend the current rules and regulations, it is necessary to be aware of the historic developments in the accountancy/audit profession. These will be set out in Section 2. Subsequently as an example of the rather limited regulations until the turn of the cen