Theoretical foundations of the audit and its quality

Summary:

The present investigation gathers a series of theoretical elements and foundations that characterize the exercise of the Audit, as well as its link to the themes of Quality, trying to achieve an association of both terms, in search of achieving the establishment of indicators and parameters that allow to measure the Quality with which the mentioned service is provided.

Audit. General features.

1.1 Historical Background of the Audit.

1.1.1 Historical development of the Audit.

The Audit in its modern conception was born in England or at least in that country is the first antecedent. The exact date is unknown, but data and documents have been found to ensure that in the late thirteenth and early fourteenth centuries the operations of some private activities and the efforts of some public officials who were in charge of the funds were already audited. of the State.

The Audit has existed since time immemorial, practically since an owner handed over the administration of his property to another person, which made the primitive Audit essentially a control against embezzlement and non-compliance with the rules established by the owner, the State or others.

As an element of analysis, financial and operational control, the Audit arises as a consequence of the development produced by the Industrial Revolution of the 19th century. Indeed, the first association of auditors was created in Venice in 1851 and later in that same century events took place that fostered the development of the profession, so in 1862 auditing was recognized in England as an independent profession. In 1867 the Companies Law was passed in France, which recognized the External Auditor or auditor. In 1879 in England the obligation to carry out independent audits of banks was established. In 1880 the title of Epaulets Accountants or Certified or Certified Accountants was legalized in England.In 1882 the role of auditors was included in Italy in the Commercial Code and in 1896 the State of New York had designated as Certified Public Accountants those who had complied with state regulations regarding adequate education, training and experience to execute the auditor's functions.

Due to the greater development of auditing in England, in the late nineteenth and early twentieth centuries many English auditors came to the United States of North America who came to audit and review the different interests in this country of English companies, giving thus, the development of the profession in North America, creating in the first years of that century the American Institute of Accountants (American Institute of Accountants).

It is convenient to consider that the accounting and auditing that were carried out in the 19th century and at the beginning of the 20th century were not subject to Auditing Standards or Generally Accepted Accounting Principles, so the difficulty in executing and interpreting them generated in the first quarter of 20th century a trend towards the unification or standardization of accounting and auditing procedures, an example of this aspiration are the aforementioned brochures issued by the American Institute of Accountants, as well as the Uniform Hotel Accounting System issued by the State Hotel Association from New York.

In 1917, at the request of the US Federal Trade Commission, the already created American Institute of Accountants prepared a "Memorandum on Balance Sheet Audits" that was approved by the Commission, published in the Federal Reserve Bulletin and distributed in the form of pamphlet to bank and business interests and accountants of that country under the name: "Uniform Accounting, Proposal presented by the Federal Reserve Committee". This booklet was reissued in 1918 under a new title, "Approved Methods for the Preparation of Balance Sheet Statements," perhaps indicating the name change to an embodiment of the utopian approach to "uniform accounting."

In 1929, the brochure was revised in light of the experience of the past decade. In addition to a change in title, (which became “Verification of Financial Statements” as evidence of growing awareness of the importance of the Income Statement), the revision contained the significant statement that “the responsibility for the extent of the required work should be assumed by the auditor ».

In 1936, the Institute as a spokesperson for a profession that was already well established at that time, reviewed the previous brochures and independently issued under its own responsibility a brochure entitled: "Examination of Financial Statements by Independent Public Accountants", two interesting ones appeared developments of the profession:

First, that the word "verification" used in the title of the above prospectus is not an accurate representation of the role of the independent auditor in examining an entity's Financial Statements.

Second, the acceptance by the Institute of the responsibility for determining and publishing the Accounting and Auditing standards and procedures.

Leveraging the work of internal auditors as part of the Financial Statement Audit review process has been specifically mandated by the American Institute of Certified Public Accountants.

1.2 Generic Definition

There is more than one definition of Audit, but this time we will see the definitions that can help us to understand and fully understand the process itself.

Then we will understand as Audit:

A collection, accumulation and evaluation of evidence on information of an entity, to determine and report the degree of compliance between the information and the established criteria. A systematic process to obtain and evaluate objectively, the evidence related to reports on economic activities and other situations that have a direct relationship with the activities that take place in a public or private entity. The purpose of the process is to determine the degree of precision of the informative content with the evidences that gave rise to it, as well as to determine if said reports have been prepared observing established principles for the case &.

From this second definition we will obtain some points that are important to analyze in order to know that the audit is a process that has several characteristics, which are essential for a complete and correct execution.

It is a systematic process, this means that in every Audit there must be a set of logical and organized procedures that the auditor must comply with in order to gather the information he needs to issue his final opinion. However, it should be noted that these procedures vary according to the characteristics that each company meets, but this does not mean that the auditor should not comply with the general standards established by the profession.

Also in this definition it is indicated that the evidence is obtained and evaluated objectively, this means that the auditor must carry out his work with an attitude of neutral independence from his work.

The evidence that the auditor should obtain consists of a wide range of information and data that can help him prepare his final report. This definition is not strict regarding the nature of the evidence that has been reviewed, rather it indicates that the auditor must use his professional judgment to know which of all the evidence that he has is appropriate for the work that he is performing, he You must consider any element or data that allows you to make an objective evaluation and express a professional opinion.

The reports to which the definition refers, not only refers to economic activities, that is, financial reports of the company, but also being a general definition, professional criteria can be applied to relate it to other activities of personal interest..

The auditor has a role to play in this process, which is to determine the degree of precision that exists between the events that actually occur and the reports that have been produced after those events have occurred.

The auditor should carry out an evaluation and a report of the events reviewed, for this he must adhere to established principles. The auditor must clearly know the principles applied in each report he issues, he must also have sufficient capacity to determine that these principles have been applied correctly in each situation. Most commonly, the auditor performs his or her work in accordance with generally accepted accounting principles (GAAP), however sometimes the appropriate principles are some laws, regulations, contractual agreements, procedure manuals and other provisions established by the authority. competent in the subject.

As we have previously seen, auditing is a process through which a subject (auditor) conducts the review of an object (audited situation), in order to express an opinion about its reasonableness (or fidelity), on the basis of an established pattern or standard.

1.2.1. Definition

The word audit comes from the Latin AUDITORIUS, and from this comes the auditor, who has the virtue of hearing, and the dictionary considers him a collegiate auditor, but it is assumed that this virtue of hearing and reviewing accounts is aimed at evaluating the economy., efficiency and effectiveness in the use of resources, as well as their control.

The audit can be defined as “a systematic process to obtain and objectively evaluate the evidence related to reports on economic activities and other related events, whose purpose is to determine the degree of correspondence of the informative content with the evidence that gave rise to it, thus how to establish whether these reports have been prepared observing the principles established for the case. "

On the other hand, the audit constitutes a tool of control and supervision that contributes to the creation of a culture of the discipline of the organization and allows to discover flaws in the structures or existing vulnerabilities in the organization.

Another element of interest is that, during the performance of their work, the auditors meet new advanced technologies on a daily basis in the entities, which is why they require the systematic incorporation of tools with the same technical requirements, as well as increasingly in-depth knowledge. of the most widespread IT techniques in management control.

1.2.2. Audit concept.

It is the investigation, consultation, review, verification, verification and evidence applied to the Company. It is the examination carried out by qualified and independent personnel in accordance with Accounting Standards; in order to wait for an opinion that shows what happened in the business; Fundamental requirement is independence.

The audit is defined as a systematic process, which consists of obtaining and objectively evaluating evidence on the claims related to acts or events of an economic-administrative nature, in order to determine the degree of correspondence between those claims and the established criteria, to then communicate the results to interested people.

According to the “Report of the Comittee on Basis Concepts” of the Auditing Concepts Comittee, in Accounting review, (1972), the audit is a systematic process to obtain and objectively evaluate the evidence related to reports on economic activities and other related events. The purpose of the process is to determine the degree of correspondence of the information content with the evidence that gave rise to it, as well as to determine whether said reports have been prepared observing established principles:

Since auditing is a systematic process of obtaining evidence, there must be logical and organized sets of procedures that the auditor follows to collect information. Although the appropriate procedures vary according to each company, the auditor will always have to adhere to the general standards established by the profession. The definition indicates that the evidence is obtained and evaluated objectively. Therefore, the auditor should undertake the work with an attitude of neutral and mental independence. The evidence examined by the auditor consists of a wide variety of information and data to support the reports prepared. The definition is not restrictive as to the nature of the evidence reviewed,rather it implies that the auditor has to use his professional judgment in selecting the appropriate evidence. He must consider any element that allows him to make an objective evaluation and express an opinion of a professional nature. The role of the auditor is to determine the degree of correspondence between the evidence of what actually happened and the reports that have been presented of those events. Report users who are generally not directly aware of what actually happened want the auditor to assure them that the information presented is an objective statement of the actual events and their results.The role of the auditor is to determine the degree of correspondence between the evidence of what actually happened and the reports that have been presented of those events. Report users who are generally not directly aware of what actually happened want the auditor to assure them that the information presented is an objective statement of the actual events and their results.The role of the auditor is to determine the degree of correspondence between the evidence of what actually happened and the reports that have been presented of those events. Report users who are generally not directly aware of what actually happened want the auditor to assure them that the information presented is an objective statement of the actual events and their results.

1.2.3. Classification of the Audits.

According to the auditor's affiliation, the Audits are classified:

External Audit, which includes the state audit and the independent audit. Internal Audit.

In turn, the state audit can be General or Fiscal.

External audit:

It is the examination or verification of transactions, accounts, information, or financial statements, corresponding to a period, evaluating the compliance or compliance with the legal or internal provisions in force in the accounting internal control system. It is practiced by empowered professionals, who are not employees of the organization whose claims or statements are audited.

In addition, it examines and evaluates the planning, organization, direction and internal administrative control, the economy and efficiency with which the human, material and financial resources have been used, as well as the result of the planned operations in order to determine if the proposed goals.

Independent audit.

External audit carried out by a civil society of services or other organizations to private, mixed entities, other forms of economic associations, state and cooperative sector, organizations and associations, natural and legal persons, that contract the audit service.

Internal audit.

Control that is developed as an instrument of the administration itself and consists of an independent assessment of its activities; which includes the examination of the internal control systems, of the accounting and financial operations and of the application of the corresponding administrative and legal provisions; in order to improve the control and degree of economy, efficiency and effectiveness in the use of resources; prevent the improper use of these and contribute to the strengthening of discipline in general.

According to the fundamental objectives pursued, audits can be:

Management or Operational.

It consists of the examination and evaluation that is carried out on an entity to establish the degree of economy, efficiency and effectiveness in the planning, control and use of resources and to verify compliance with the relevant provisions, with the aim of verifying the most rational use resources and improve the activities and subjects examined.

Financial or Financial Statements.

It consists of the examination and evaluation of the entity's documents, operations, records and financial statements, to determine if they reasonably reflect its financial situation and the results of its operations, as well as compliance with economic and financial provisions, with the objective of improving procedures related to economic - financial management and internal control.

Special.

It consists of the verification of specific matters and subjects, of a part of the financial or administrative operations, of certain facts or special situations and respond to a specific need.

Likewise, they include research work, and the audit that is carried out with the aim of knowing to what extent the deficiencies previously detected have been eradicated. These cases are commonly identified as Recurring or Follow-up Audits.

Fiscal.

External audit that is carried out by the Ministry of Finance and Prices, its dependencies or other entities expressly empowered by it, with the objective of determining if the taxes to the treasury are carried out in the due amount and within the established deadlines and forms. (It is up to the National Tax Administration Office - ONAT to exercise these functions).

These definitions correspond to those established in Decree Law 159 On Auditing of June 8, 1995.

1.3 Generally Accepted Auditing Standards (NAGAS)

1.3.1. Concept

The Generally Accepted Auditing Standards (NAGAS) are the fundamental audit principles to which auditors must adhere to their performance during the audit process. Compliance with these standards guarantees the quality of the auditor's professional work.

1.3.2. Origin

The NAGAS, has its origin in the Bulletins (Statement on Auditing Standard - SAS) issued by the Audit Committee of the American Institute of Public Accountants of the United States of America in 1948

Therefore, these standards are mandatory for the Public Accountants who carry out the audit in our country, since it will also serve as a measurement parameter of their professional performance and for the students as guide guides of conduct where they will have to walk when be professional.

1.3.3. NAGAS classification

Currently the NAGAS, in force in our country are 10, the same that constitute the (10) ten commandments for the auditor and are:

General or Personal Rules

to. Training and professional capacity

b. Independence

c. Care or professional dedication.

Work Execution Standards

d. Planning and Supervision

e. Study and Evaluation of Internal Control

f. Sufficient and Competent Evidence

Report Preparation Rules

g. Application of Generally Accepted Accounting Principles.

h. Consistency

i. Disclosure Enough

j. Auditor's opinion

1.3.4. Definition of Standards

These rules, due to their general nature, apply to the entire examination process and are basically related to the auditor's functional conduct as a human person and regulates the requirements and skills that must be met to act as Auditor.

Most of this group of standards are also covered in the Codes of Ethics of other professions. The Standards detailed above are defined as follows:

Training and Professional Ability

"The audit must be carried out by personnel who have the technical training and expertise as an auditor."

As can be seen from this standard, it is not only enough to be a Public Accountant to exercise the role of Auditor, but it is also required to have adequate technical training and expertise as an auditor. That is, in addition to the technical knowledge obtained in university studies, practical application in the field is required with good management and supervision. This constant training, training and practice shapes the maturity of the auditor's judgment, based on the experience accumulated in its different interventions, finding itself in a position to exercise auditing as a specialty. Otherwise, it would be to deny their own existence because it will not guarantee professional quality to the users, this despite the fact that the rules are multiplied to regulate their performance.

Independence

"In all matters related to Auditing, the auditor must maintain independent judgment."

Independence can be conceived as the professional freedom that assists the auditor to express his opinion free of pressures (political, religious, family, etc.) and subjectivities (personal feelings and group interests).

Therefore, impartial objectivity is required in their professional performance. Although it is true, the independence of criteria is a mental attitude, the auditor must not only "be it", but also "seem it", that is, take care of his image before the users of his report, who is not only the client who hired him but also the other interested parties (banks, suppliers, workers, state, town, etc.).

Care or Professional Care

"Professional care must be exercised in the execution of the audit and in the preparation of the opinion."

Professional care is applicable for all professions, since any service that is provided to the public must be done with all the diligence of the case, the opposite is negligence, which is punishable. A professional may be very capable, but he totally loses his value when he acts negligently.

The auditor's professional dedication is not only applied in the field work and preparation of the report, but in all phases of the audit process, that is, also in strategic planning or planning, taking care of materiality and risk.

Therefore, the auditor will always have the purpose of doing things well, with all integrity and responsibility in their performance, establishing a timely and adequate supervision of the entire audit process.

Work Execution Standards

These standards are more specific and regulate the form of the auditor's work during the development of the audit in its different phases (planning field work and preparing the report). Perhaps the main purpose of this group of standards is for the auditor to obtain sufficient evidence in their working papers to support their opinion on the reliability of the financial statements, for which, adequate strategic planning and evaluation are previously required. of internal controls. Currently the new opinion emphasizes these aspects in the scope paragraph.

Planning and Supervision

"The audit must be properly planned and the work of the auditor's assistants, if any, must be properly supervised."

Due to the great importance that has been given to planning in recent years at the national and international level, today strategic planning is conceived as a whole work process that is highly emphasized, using the "top-down" approach, that is to say, it should not start by reviewing individual transactions and balances, but by taking knowledge and analyzing the characteristics of the business, the organization, financing, production systems, functions of the basic areas and important problems, the economic effects of which could have a significant impact on the financial statements subject to our examination. Logically, the planning ends with the preparation of the audit program.

In the case of an audit commission, the supervision of the work must be carried out in a timely manner throughout all the phases of the process, that is, planning, field work and the preparation of the report, guaranteeing its professional quality. This supervision should be recorded in the working papers.

Study and Evaluation of Internal Control

«The internal control structure (of the company whose financial statements are subject to audit should be properly studied and evaluated as a basis to establish the degree of confidence it deserves, and consequently, to determine the nature, scope and timeliness of the procedures audit".

The study of internal control constitutes the basis for relying or not on accounting records and thus being able to determine the nature, scope and timeliness of the audit procedures or tests. Currently, much emphasis has been placed on internal controls and their study and evaluation leads to a whole process that begins with an understanding, continues with a preliminary evaluation, compliance tests, reevaluation of controls, finally arriving - according to your evaluation results - to limit or expand substantive testing.

In this sense, the internal control works as a thermometer to scale the size of the substantive tests.

The modern concept of internal control includes the components of the control environment, risk assessment, control activities, information and communication, and those of supervision and monitoring.

The evaluation methods that are generally used are: descriptive, questionnaires and flow charts.

Sufficient and Competent Evidence

"Competent and sufficient evidence must be obtained through inspection, observation, inquiry and confirmation to provide a reasonable basis for the expression of an opinion on the financial statements subject to the audit."

As can be seen from the statement of this standard, the auditor, by applying the audit techniques, will obtain sufficient and competent evidence.

Evidence is a set of proven, sufficient, competent and pertinent facts to support a conclusion.

The evidence will be sufficient, when the results of one or more tests assure the moral certainty that the facts to be proven, or the criteria whose correctness is being judged, have been reasonably proven. Auditors also obtain sufficient evidence through absolute certainty, but mostly with moral certainty.

It is important to remember that it will be the maturity of the auditor's judgment (obtained from experience), which will allow him to achieve sufficient moral certainty to determine that the fact has been reasonably verified, so that as it decreases (decreases) Through the different levels of experience of the auditors, moral certainty will be poorer. This is why supervision of assistants by experienced auditors is required to achieve sufficient evidence.

The evidence is competent when it refers to facts, circumstances or criteria that have real importance, in relation to the matter examined.

Among the kinds of evidence the auditor obtains we have:

Evidence about internal control and the accounting system, because both influence the balances of the financial statements. Physical evidence Documentary evidence (originated inside and outside the entity) Daily and older books (includes records processed by computer) Global analysis Independent calculations (computing or calculation) Circumstantial evidence Events or subsequent events.

Report Preparation Rules

These standards regulate the last phase of the audit process, that is, the preparation of the report, for which the auditor will have accumulated sufficient evidence, duly supported in his working papers.

For this reason, this group of standards requires the report to set out how the financial statements are presented and the degree of responsibility assumed by the auditor.

Application of Generally Accepted Accounting Principles (GAAP)

"The opinion must express whether the financial statements are presented in accordance with generally accepted accounting principles."

The generally accepted accounting principles are general rules, adopted as guides and as a basis for accounting, approved as good and prevailing, or we could also conceptualize them as laws or fundamental truths approved by the accounting profession.

However, it is worth clarifying that GAAP are not principles of nature but rules of professional behavior, so they are immutable and need to be adapted to meet the changing circumstances of the entity where the accounting is kept.

GAAP guarantees the reasonableness of the information expressed through the Financial Statements and its observance is the responsibility of the company examined.

In any case, it is up to the auditor to disclose in his report whether the company has been framed within accounting principles.

Auditor's opinion

"The opinion must contain the expression of an opinion on the financial statements taken in their entirety, or the assertion that an opinion cannot be expressed. In the latter case, the reasons that prevent it must be indicated. In all cases, where the name of an auditor is associated with financial statements, the opinion must contain a clear indication of the nature of the audit, and the degree of responsibility it is taking.

Recall that the main purpose of the audit of financial statements is to issue an opinion on whether or not they reasonably present the financial situation and results of operations, but the case may arise that despite all the efforts made by the auditor, If you have been unable to form an opinion, then you will be forced to refrain from giving an opinion.

Therefore, the auditor has the following alternatives of opinion for his opinion.

Clean or unqualified opinion Qualified or qualified opinion Adverse or negative opinion

Refraining from giving an opinion Every day more, the competitiveness of a country rests on its knowledge and its innovative capacities, for which reason development policies related to the incorporation and adaptation of new technologies, the consequent administrative restructuring, R&D projects to improve production and administrative processes and research and development of new and improved products.

It is a fact that it is no longer possible to support the economic development of a country, or that of its companies, on the basis of cheap labor or using perpetual mechanisms of protection of the domestic industry. The binomial import substitution - increase in export levels requires organizations to fully improve their technological and management processes, which implies the adequate administration of all their resources, among which technological resources play a fundamental role.

1.4 Concepts and Evolution of the term Quality.

Quality as a term of great importance arises from the fact that entrepreneurs or merchants, as they were previously called, realize the need to compete in the market with their products or services. Obviously this element and its concepts have evolved over time.

Different authors have referred through the study of quality as a requirement of a product or service to guarantee its competitiveness and permanence in the market. We will mention some as an example:

"Meet Specifications" P. Krosby, "Fitness for Use, Satisfying Customer Needs" J. Juran, "A Predictable Degree of Uniformity and Reliability at Low Costs, Appropriate to Market Needs" EW Deming, "An Effective System to integrate the efforts to improve the Quality of the different groups of an organization, to provide products and services at levels that allow customer satisfaction ”AV Feigenbaum, Quality as a Loss Function. G. Taguchi.

We can then define quality as the degree to which a set of inherent characteristics of a product, system or process meets the requirements of customers and other interested parties. Quality is not: quality circles, using “some” tools or having a set of procedures written.

This evolution helps us understand where the need to offer a higher quality of the product or service provided to the customer and, ultimately, to society, comes from, and how little by little the entire organization has been involved in achieving this end. Quality has not only become one of the essential requirements of the product, but it is currently a key strategic factor that most organizations depend on, not only to maintain their position in the market but even to ensure their survival..

1.4.2. Quality in the Audit.

According to the management groups of Japanese companies, the secret of the most successful companies in the world lies in having high quality standards for both their products or services and their employees; therefore total quality control is a philosophy that must be applied at all hierarchical levels in an organization, and this implies a process of Continuous Improvement that has no end.

To carry out this Continuous Improvement process, it must be taken into consideration that said process must be: economic, that is, it must require less effort than the benefit it provides; and cumulative, that the improvement that is made allows to open up the possibilities of successive improvements while guaranteeing the full use of the new level of performance achieved.

What does Continuous Improvement mean to achieve quality in the processes?

James Harrington (1993), for him improving a process, means changing it to make it more effective, efficient and adaptable, what to change and how to change depends on the specific approach of the entrepreneur and the process.

Fadi Kabboul (1994) defines Continuous Improvement as a conversion into the viable and accessible mechanism by which companies in developing countries close the technological gap they maintain with respect to the developed world.

Abell, D. (1994), gives as a concept of Continuous Improvement a mere historical extension of one of the principles of scientific management, established by Frederick Taylor, who affirms that every work method is capable of being improved (taken from the Course of Continuous Improvement dictated by Fadi Kabboul).

Eduardo Deming (1996), according to this author's perspective, total quality management requires a constant process, which will be called Continuous Improvement, where perfection is never achieved but is always sought.

Finally we can affirm that Continuous Improvement is a process that describes very well what the essence of quality is and reflects what needs to be done if you want to be competitive over time.

The importance of this management technique lies in the fact that its application can contribute to improving weaknesses and strengthening the strengths of processes and entities.

The search for excellence comprises a process that consists of accepting a new challenge every day. Said progress must be progressive and continued. You must incorporate all the activities carried out in the company at all levels.

Advantage

The effort is concentrated in organizational areas and specific procedures.

They get improvements in a short term and visible results

If there is a reduction in products, in our case we say defective processes, which results in a reduction in costs.

It increases productivity and directs the organization towards competitiveness, which is of vital importance for current organizations.

Contributes to the adaptation of processes to technological advances.

It allows to eliminate repetitive processes. Important when it comes to Audits.

Over the years the Audit has been worked by its practitioners, as well as by the supervisory entities, setting only limited goals, which have prevented them from seeing beyond their immediate needs, that is, they only plan short-term results and on the other On the other hand, there are no defined quality criteria to measure whether the results achieved have optimal levels of this and, therefore, the absence of these essential criteria means that work is not oriented towards obtaining results that allow credibility and high profitability.

The European community has already spoken out for the quality requirements in the audit, according to the conclusions of the Lisbon European Council, the Commission of the European Communities and the Audit Committee of the European Union published a Communication entitled "The strategy of the European Union in the field of financial information: the way forward », which underlines the importance of the highest level of uniformity in the audits carried out throughout the European Union and also spoke out because the Member States adopt measures that guarantee that all the people who carry out audits are subject to a quality control system.

The term "persons" corresponds to the employee who performs statutory audits (account auditors). Currently not all people who carry out statutory audits in the European Union are subject to a quality control system. They also state that quality control of statutory audits is essential to ensure their good quality. The good quality of the Audits results in a greater credibility of the published financial information and in a better protection of shareholders, investors, creditors and other holders of securities and affirm that the opinions of Audits in the European Union must give a minimum level of guarantees about the reliability of financial information.It could then be argued that Member States should have taken steps to ensure that all statutory auditors performing Statutory Audits are subject to a quality control system.

These aspects allow us to realize that the subject is being worked on and dealt with in the international community and positions on it are already being assumed.

Defining the quality in the performance of the Audit is also an aspect of vital importance in the economic and business world according to current trends, since it means the assurance that these have been carried out in compliance with the principles and standards established for its exercise, in addition to the importance of checking and evaluating the correspondence of the opinion with the real situation of the audited entity. This issue has constituted a need identified worldwide by the different audit entities, given the situations that have arisen and which have put the criteria and work carried out by auditors in crisis, generating a deterioration in their prestige and independence, caused for corruption and other types of fraud.In the national context, the Ministry of Audit and Control has ruled on the need to design a procedure to determine the reliability and quality of the work carried out by its auditors.

The quality requirements will ensure a correct conception of the Audit and will lead it to achieve the fullness and development of its full potential. This imperative arises from the growth phase of the activity, in which it is framed in our country, so aspects related to the conditions for its development and permanence must be present in any review of the auditor's work in order to lead him towards a path of trust and credibility in his work, giving him prestige before society.

Most of the countries of the so-called “Third World” and, especially, the Latin American economies, are going through an increasingly difficult situation in the context of the world economy. Development, to a certain extent uprooted from its national needs, has practically turned, in a chimera, the yearnings to establish a new, true and fair international economic order, which has become a globalization, predominantly neoliberal, of markets and economies, with dire consequences for these countries. Therefore, current times require, above all, a political will not to blindly subject economic decisions to doctrines and "neoliberal recipes",as well as the clear definition of a strategy that is based on the progressive increase in the competitiveness of the business sector, for which it is necessary to develop the “domestic skills” to select, assimilate and transform technologies, while continuing to generate other indigenous ones..

Cuba has not been oblivious to all the transformations that have occurred in the business field worldwide, but developing its own economic model and its strategies, without taking into account the recipes of the current world that travel from one part to another to the underdeveloped countries and of economy absolutely dependent on the developed ones.

For this reason, Cuban companies that produce goods or services are in search of higher goals to achieve in their results, advocating to establish quality parameters already established or to be established.

The Audit has long been busy establishing itself and has not had much room for internal analysis; At this time, he has achieved a degree of maturity that does not allow him to ignore an introspective that considers aspects that require attention and that primarily guarantee the quality of the auditor's work in order to lead him towards a path of trust and credibility in his work, giving him prestige before the society.

The audit is a systematic process to obtain and evaluate evidence, this requires the auditor, a set of logical and organized procedures that, even when they vary according to the case, must follow general parameters that allow for quality work, making this a constant concern and permanent auditor.

The evolution of the audit function has not stopped in recent years and its powers and responsibilities are increasing. The road traveled is long, today it is next to the highest level of management and informing it, which places it facing great challenges.

Auditing is an important part of management control. When an evaluation of the results of this is required, the work of the auditors can be used to provide reasonable assurance that management controls are functioning properly.

Quality is essential in the development phase of an audit system, since it offers reasonable assurance that the audit service maintains the capacity to carry out its functions efficiently and effectively, and thus achieve a high level of credibility and confidence in the face of management, auditors and society. You can enter to analyze various parameters that must be considered in the quality of the audit.

From the experience that is accumulating day by day it is surprising the serious deficiencies that companies suffer in terms of auditing and internal control, including not only small and medium-sized companies, but also large companies, for this the famous example is enough the case of Barhing Bank, or that of large state-owned companies.

Firstly, we must underline the lack of compliance with the basic and fundamental rules on internal control, but on the other hand, there is the lack of broad concepts regarding the heritage to protect, and the methods and instruments of analysis to be used. by internal auditors.

As in quality control, the lack of planning and prevention is the norm in many companies regarding both the control and the actions of the audit. Therefore, it is not surprising to see the auditors trying to analyze what went wrong, why, and what to do to avoid their repetition, when the right thing is to act preventively, and if some detrimental event occurs, do not stay in the most superficial aspects. but to go deeper until reaching the root cause, trying to unravel in such a way the reasons that led the system to generate these shortcomings.

Another important aspect to question in audits is that it is perceived as an entity dedicated only to inspection (and sometimes even with a police perspective), and not to advice with the aim of protecting and improving the operation of the organization. It is necessary to conform a new vision of audits with a systemic approach, in such a way to locate it as a component of said system, in charge of protecting the proper functioning of the internal control system (subsystem at the company level), but also to safeguard the good operation of the company for the purposes of its survival and achievement of the proposed goals.

In the new vision of auditing, it must be integrated into Total Quality Management, making full use of the different instruments and management tools in order to achieve higher levels in the provision of its services.

The problem of quality is a topic that has been developed in multiple investigations, fundamentally in tangible goods and through the establishment of norms that regulate its operation and control. Until today, marketing, and particularly that of services, has not given in our country the weight that the quality with which services must be provided should have, let alone the possibility of using it as a differentiation strategy, especially when it is presented as a decisive tool to ensure that the services we offer are perceived in a similar way by the client, with respect to those of the competition.

The services sector has been acquiring increasing importance in the economic set of most nations. Both in volume of activity and in employment figures, it is the most important and most dynamic economic sector. Although the measurement of production in services is more difficult than in industry or agriculture, and activities tend to be more informal, which may lead to an underestimation of the importance of services around 60% of GDP in most of the countries. Developed countries come from the tertiary sector (trade and services) and a similar proportion of the employed population works in this sector. Furthermore, these proportions have not stopped growing in recent years.

The services have differential characteristics that constitute the main reason that justifies the study of Total Quality in the Management of Services, some differences of the services with respect to tangible goods pose considerable problems for the evaluation of the total quality and makes it necessary to apply methods specific for it.

The strong competitive pressure that is registered at present, makes companies have to use the quality weapon to retain their clients and get new ones; And this, which is true for all types of companies, is much more true for service companies.

It should be borne in mind that the service must be provided well from the first time, since there can be no waste; A faulty service cannot be resold in a second-hand market, nor can it be repaired. For this reason, it is necessary to study in depth how to improve the quality of services in order to properly serve potential customers, making their purchase loyal and acquiring, in turn, competitive advantages over competing banks.

Sometimes specialists are heard saying that they do not know how to differentiate their services from those of the competition.

The importance of service quality as a differentiating factor is so great that it must be subject to rigorous and systematic control, which detects any insufficiency or inadequacy in the provision of services.

But this quality is a subjective phenomenon and, therefore, difficult to measure, since it is based on the perceptions and preferences of customers or users and is the difference between what they expect to obtain from the service and what they actually obtain, reason why it is stated that one of the main ways of differentiating the services of a company is to consistently provide a quality of service superior to that of the competition.

Audit Organizations must have an appropriate Internal Quality Control System and must be the target of an external quality review program.

At the present time, it is necessary to streamline the work of the audits, making the quality standard play an important role, which is why the work must be aimed at determining whether:

The audit organization supervises the activity in all stages of work, therefore it requires the supervisor to participate in the exploration or preliminary examination, supervision and review, stage of legal provisions and other regulations, stage of administration controls, Internal Control, stage of evidence and analysis of the Financial Statements. Must enforce the Applicable Standards of Auditing. The reports are made with quality and that the documents that support it also have this quality; reports must be clear, accurate, without misspellings.The audit organization of the body or agencies carries out the aforementioned reviews to the audit units of the companies and budgeted units that are subordinate to it in order to check all the audit organizations at least once every two years, an aspect that does not It can be accomplished by a shortage of auditors.

In the process of some of the visits to UAIs and local subordinate companies, a group of deficiencies could be detected that we proceed to detail:

Supervision is not carried out at all stages of the audit. No evidence is left of the reviews by the Group Heads. The audit records lack sufficient, competent and relevant evidence. The working papers do not indicate the proposed objectives and the Archiving of these is not carried out properly. Groups of auditors are not up-to-date, lacking current legislation.

These factors make it difficult for some UAIs and their internal auditors to integrate into the system. Faced with this problem, the training of these auditors began by the UCAI, linking up with audits carried out by this instance, obtaining direct training, with positive results.

Currently, the MAC issued Resolution No. 318/2003 through which the audit directorates are supervised and controlled: the delegations of the Ministry, the Central Units of Internal Audit and the Units of Internal Audit. The aforementioned resolution implemented the program for supervision and control of internal auditors who carry out their work as an instrument of the administration itself.

Despite the multiple efforts, it has not been able to apply these guidelines to all the bodies subordinate to the System, frequently detecting problems in the quality of the Audits.

Quality elements associated with the Audit are managed but not exactly the quality in the exercise of it, but rather there are in-depth studies on the Audit of the Quality systems.

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