Český finanční a účetní časopis 2018(1):5-23 | DOI: 10.18267/j.cfuc.507

Nature of Audit and Demand for Audit

Michal Bobek
Vysoká škola ekonomická v Praze, Fakulta financí a účetnictví, katedra financí a oceňování podniku, nám. W. Churchilla 4, 130 67 Praha 3.

The article analyses the purpose of audit in the current market economy. The article focuses on the demand for the audit. The article presents theories of audit (Policeman theory, Lending credibility theory, Theory of inspired confidence and Agency theory) and hypothesis of existence of audit (Monitoring hypothesis, Information hypothesis and Insurance hypothesis). These theories explain the reasons for the existence of the audit and its functions. These theories and hypothesis are compared with the factors determined as crucial for forming the demand for audit services. The article compares the results to the current development and repetitive misstatements in audited financial statements. The results and presents the reasons for that.

Keywords: Audit; Demand for audit; Agency theory.
JEL classification: M42

Published: May 1, 2018  Show citation

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Bobek, M. (2018). Nature of Audit and Demand for Audit. Czech Financial and Accounting Journal, 2018(1), 5-23. doi: 10.18267/j.cfuc.507
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