Ian Fraser and Chris Pong
The purpose of this paper is to provide an overview of the challenges and opportunities currently facing external auditors at a time of economic and financial crisis.
Abstract
Purpose
The purpose of this paper is to provide an overview of the challenges and opportunities currently facing external auditors at a time of economic and financial crisis.
Design/methodology/approach
The paper has a particular focus on the other contributions to this special issue of Managerial Auditing Journal and provides a reflective synthesis of these while making reference to other relevant literature as appropriate.
Findings
The paper puts forward various suggestions for future academic research that might improve auditing practice. Also, the principal aim of this special issue has been to spotlight differing perspectives on some of the perennial problems which have plagued auditing for generations and to suggest possible ways forward.
Practical implications
Various suggestions for future academic research that might improve auditing practice are put forward in the paper.
Originality/value
Major contemporary issues facing the auditing profession (or industry) are summarized. The paper highlights the diversity of value stances that exists in the audit academy and may (together with the other papers forming part of this special issue) be useful for introducing university students studying auditing at intermediate or advanced levels to a variety of current auditing issues and debates.
Details
Keywords
John Innes, Tom Brown and David Hatherly
Reports research results which were presented to the Working Party of the Auditing Practices Board, which developed Statement of Auditing Standards 600 on the expansion of the…
Abstract
Reports research results which were presented to the Working Party of the Auditing Practices Board, which developed Statement of Auditing Standards 600 on the expansion of the audit report. Provides a brief discussion of the working party’s reception of the research. Results revealed that, with the short audit report used in the UK until September 1993, a gap existed between auditors and users with 14 of the 18 audit dimensions having statistically significant differences. An expanded audit report (a British version of SAS 58 constructed by the authors) changed users’ perceptions although ten of these 18 dimensions still had statistically significant differences between the users and the auditors. Expansion of the audit report is only a partial “solution” and needs to be combined with other measures, such as changing audit activities. An analysis of the dimensions for which users’ perceptions of the audit are enhanced shows that expansion of the audit report allows the audit profession to enhance its status without any change in actual audit activities or auditor accountability.
Details
Keywords
The purpose of this paper is to challenge the conceptual basis upon which the current auditing standards are based.
Abstract
Purpose
The purpose of this paper is to challenge the conceptual basis upon which the current auditing standards are based.
Design/methodology/approach
The paper critically appraises the Auditors' Code published by the Auditing Practices Board and containing the nine fundamental and enduring principles upon which current auditing standards are based.
Findings
It is argued that the nine enduring principles should be replaced by seven enduring tensions – the fault lines of auditing – so as to rethink the conceptual basis of auditing standards. Five of these are drawn from the paper's analysis of the Auditors' Code and two are based upon the author's experience of the issues arising in the preparation of the Code and the ensuing debate.
Research limitations/implications
Further research should be carried out to test the robustness of the seven enduring tensions as the basis for standard setting. A first step might be to map the existing standards onto the new conceptual basis.
Practical implications
Standard setters can deploy a new architecture for auditing standards and one that addresses the tensions inherent in auditing. Standard setting should be recognised as an activity dominated by ethical choices and concerns.
Originality/value
The new conceptual basis should provide us with a much closer reading of what auditing is, and its potential for development without expectation gaps.
Details
Keywords
This paper aims to look back from the point of view of a non‐executive director on the changes in the auditing profession in the last 15 years and to give reflections on the…
Abstract
Purpose
This paper aims to look back from the point of view of a non‐executive director on the changes in the auditing profession in the last 15 years and to give reflections on the issues which presented the profession and the public today.
Design/methodology/approach
Reviews the last 15 years vis‐à‐vis changes in the auditing profession and considers matters with which auditors and public are faced today.
Findings
This paper highlights that the concept of having fundamental principles and codes is much more likely to gain support and be practical than having rules laid down in statute. People should “explain” more often than “comply” because it is in their business interest and in the interest of the public. Reward comes from taking risk and it is very important that we do not make UK plc less competitive than the world markets by becoming too risk averse.
Originality/value
The paper questions whether it is time to review the efficacy of the statutory audit. The pendulum has now swung and it is time to address whether it should swing any further or whether in fact it is a time for balance to be brought into the various systems and codes based on the experience of the last few years.
Details
Keywords
ChunLei Yang, Robert W. Scapens and Christopher Humphrey
The paper proposes a place-space duality, rather than a dualism, for accounting research.
Abstract
Purpose
The paper proposes a place-space duality, rather than a dualism, for accounting research.
Design/methodology/approach
The discussion is informed by the literature in human geography, which, while developing the concept of space, has made an important distinction between abstract space and place as a site of experiential learning and memory.
Findings
The lack of a concept of place is a serious omission in the accounting literature and perpetuates an abstract sense of space, which can restrict the scope of accounting research.
Research limitations/implications
The paper calls for further research to study accounting in place and to explore both the collective and individual senses of place, as well as conscious and unconscious place associations. We recognise that there is limited prior accounting research on this topic and that there are challenges in conducting such interdisciplinary research, especially as there is a lack of common ground between research in human geography and accounting and little integration of the two literatures.
Practical implications
The paper proposes an accounting research agenda based on a place-space duality, which reflects the strength of people-place relationships, including place identities, place attachment and place dependence.
Originality/value
The paper provides a critique of the conceptualisation of space in accounting research, identifies place-space as a duality (rather than a dualism) and suggests a novel distinction between studying accounting in context and in place.
Details
Keywords
Kamil Omoteso and Musa Obalola
This chapter adopts Porter’s ‘audit trinity’ approach comprising internal audit, external audit and audit committee to discuss the role auditing can play in the management of…
Abstract
Purpose
This chapter adopts Porter’s ‘audit trinity’ approach comprising internal audit, external audit and audit committee to discuss the role auditing can play in the management of corporate fraud.
Design/methodology/approach
The chapter maps the historical background of and the developments in external audit as an assurance service, the internal audit function and the audit committee. Based on this, it explains the nature, types and possible causes of corporate fraud within the context of business risk with a view to establishing how auditing can help in managing such frauds.
Findings
The chapter highlights the relationships that should exist between the three audit types in order to support a sound internal control system as a tool for preventing and detecting corporate fraud.
Research limitations/implications
The chapter identifies cost, opportunity, connivance and managerial override as factors that could limit the ability of auditing to manage corporate fraud. It also suggests ways of addressing these limitations.
Practical implications
As the current upward trend in IT adoption for corporate operations continue to open new sets of corporate fraud windows, this chapter examines how an entity’s internal controls can be used to prevent and detect these growing fraud schemes.
Originality/value
The chapter’s unique strength is its adoption of a holistic approach to auditing to suggest ways of managing corporate fraud – a novelty in the corporate fraud literature. It is hoped that future research in the area will bring empirical insights to the issues raised and perspectives covered in the chapter.