The demand for auditing services arises from a need to facilitate dealings between the parties involved in business relationships—shareholders, creditors, public authorities, employees and customers, etc. Exchanges between such parties are usually costly since informational asymmetries give rise to uncertainty concerning the performance of the contractual obligations.

In this context of contractual opportunism and, along with other instruments and safeguards, accounts are used to enhance the likelihood of performance and demonstrate a willingne

a statutory condition of recognition would give impetus to the goal of a

ss to perform to potential contracting parties. The preparation of accounts is controlled by one of

· the Financial Reporting Council (FRC) should take on the functions of the Accountancy Foundation to create a unified and authoritative structure (“the independent regulator”) with three clear areas of responsibility; the setting of accounting and audit standards; their enforcement or monitoring; and the oversight of the major professional accountancy bodies;

However, consistent with the nature of the existing statutory

of executives and businessmen as agents to be monitored and as those responsible for actually preparing the accounts reduces the value of the latter to third parties. A review of accounts by an independent expert, the external auditor, is useful to enhance their reliability in the eyes of other contracting parties who are not involved in their preparation. There is thus a demand amongst companies for independent auditing to reduce their contractual or transaction costs.

C) the approval of a person for the purpose of giving practical training or the withdraw of such approval. (s.32(2),CA 89).

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