Theoretical and Regulatory Foundations of Currency Operations Auditing under International Standards

Abstract

Objective: This article discusses the theoretical, legal and regulatory background of currency operations and their audit using international standards. It offers a thorough discussion of the definition, classification and legal framework of foreign exchange transactions, and the relevance of some of the major International Standards on Auditing (ISA) to currency-related audit engagements. Methodology: The research uses a doctrinal legal approach and comparative study of the legal acts of the countries (the Law on Currency Regulation in Uzbekistan and the directives of the Central Bank) and the international legal principles (IMF and FATF guidelines and recommendations). The paper also discusses the ISA 315, ISA 330, and ISA 500 as the basis of risk assessment, response to auditing, and evidence gathering in auditing of currency operations. Findings: The findings of the analysis is that though Uzbekistan has gone a long way in ensuring that the regulation of its currency is in tandem with the international standards, there are still loopholes in the practical implementation of the risk-based auditing practices. The paper singles out the lack of region-specific audit guidelines and empirical research on the implementation of ISA in Central Asian settings as research gaps. Practical Implications: The results highlight the importance of improved auditor training, alignment of national auditing standards with ISA, and creation of specialized audit programs to suit currency operations in new economies. Originality/Value: The paper adds a coherent theoretical framework of auditing currency activities in accordance with ISA, combining the views based on financial law, audit theory, and international regulatory practice with special references to the current financial situation in Uzbekistan.

Keywords: Currency operations, International Standards on Auditing (ISA), currency regulation, audit risk assessment, financial law, Uzbekistan.