Audit policy making in the UK

Abstract

In accounting discourses, the going concern concept is considered to be ‘fundamental’ yet in auditing it is considered to be ‘material but not fundamental’. Like all other social concepts and practices, ‘going concern’ is multi-accented and its meanings cannot be stabilized. Against such a background, the UK accountancy bodies formulated and issued the auditing guideline The Auditor's Considerations in Respect of Going Concern in 1985. The purpose of this paper is to explore audit policy making in the UK by examining the formulation of the auditing guideline. The evidence suggests that the auditing guideline was an attempt by the professional bodies to manage a crisis of auditor responsibility. It suggests that a major aim of the guideline was to minimize audit effort in order to give maximum protection from litigation to major auditing firms.