Charika Channuntapipat, Anna Samsonova-Taddei and Stuart Turley
The purpose of this paper is to understand sustainability assurance (SA), and diversity in that practice, by examining assurance providers’ understandings of the practice and the…
Abstract
Purpose
The purpose of this paper is to understand sustainability assurance (SA), and diversity in that practice, by examining assurance providers’ understandings of the practice and the influences that those understandings have on the actual assurance process. It focuses on the issues beyond the content of statements in SA reports.
Design/methodology/approach
This paper employs semi-structured interviews, supplemented by textual data sources. Research participants are assurance providers in the UK, including those within and outside the accounting profession. Drawing on the perspective of actor-network theory, the study focuses on the associations between different actors and how those shape the assurance practice.
Findings
The findings indicate that providers’ understandings of SA practice vary significantly. This variation has a major effect on how the assurance practice is conducted. The study identifies four types of SA engagements, which are designated as: social assurance, integrated assurance, formative assurance and compliance assurance. Such a categorization provides a broad-based understanding of the operationalization of SA and the degree of heterogeneity within it.
Originality/value
This paper extends the understanding of SA by focusing on the practice beyond the statements made by assurance providers, which have been the predominant focus of analysis in the existing literature, and by offering a categorization of the diversity in practice. The focus on the associations between assurance providers and other actors provides a new perspective for exploring the fundamentals of the practice.
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Christopher Humphrey, Stuart Turley and Peter Moizer
The auditor′s responsibility with respect to fraud has been one ofthe issues which has been associated most persistently with questionsabout the adequacy of audit performance…
Abstract
The auditor′s responsibility with respect to fraud has been one of the issues which has been associated most persistently with questions about the adequacy of audit performance. Examines the way in which the position of the accountancy profession in Britain on this subject developed during the 1980s – a period of considerable professional activity with respect to the issue of the auditor and fraud. While the profession has been persuaded to accept additional responsibilities concerning the reporting of detected fraud, it is argued that no such development has occurred with respect to the auditor′s responsibilities concerning fraud detection. The current nature of the auditor′s duties regarding fraud detection is seen as contestable. While further government action may force the profession to assume additional responsibilities in this respect, any such developments are seen as needing more detailed investigation of the precise capacities of audit practice in detecting (particularly management) fraud.
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Christopher Humphrey, Peter Moizer and Stuart Turley
This paper reviews key aspects of the regulatory response in the UK and the USA to the apparent crisis of confidence in auditing stimulated by Enron and other recent corporate…
Abstract
This paper reviews key aspects of the regulatory response in the UK and the USA to the apparent crisis of confidence in auditing stimulated by Enron and other recent corporate scandals. Drawing on a consideration of the nature of the market for auditing services and the regulatory and corporate governance structures in which auditing is embedded, the paper argues that the bulk of recent regulatory attention appears to have been on matters of auditor independence rather than auditor competence. Such a focus is seen to have parallels with former ‘crisis’ eras in the auditing arena, while the analysis presented also raises questions about the status of the auditing function within accounting firms and the capacity of regulatory reform to deliver a fundamentally enhanced auditing function. The paper concludes by stressing the importance of making more transparent what is being done in the name of auditing and audit regulation.
Michael Sherer, Alan Southworth and Stuart Turley
This paper reports the findings of an empirical investigation into the disclosure of corporate accounting information to trade union decision makers. These findings are evaluated…
Abstract
This paper reports the findings of an empirical investigation into the disclosure of corporate accounting information to trade union decision makers. These findings are evaluated against earlier normative and descriptive literature on corporate disclosure to trade unions and an attempt is made to derive some implications for the design of accounting reports for use in the context of collective bargaining. The research methodology used was a case study of decision making in one trade union, the Amalgamated Textile Workers' Union (ATWU) which represents most of the manual workers in the Lancashire cotton industry.
Stuart Turley and Mahbub Zaman
This paper seeks to investigate the conditions and processes affecting the operation and potential effectiveness of audit committees (ACs), with particular focus on the…
Abstract
Purpose
This paper seeks to investigate the conditions and processes affecting the operation and potential effectiveness of audit committees (ACs), with particular focus on the interaction between the AC, individuals from financial reporting and internal audit functions and the external auditors.
Design/methodology/approach
A case study approach is employed, based on direct engagement with participants in AC activities, including the AC chair, external auditors, internal auditors, and senior management.
Findings
The authors find that informal networks between AC participants condition the impact of the AC and that the most significant effects of the AC on governance outcomes occur outside the formal structures and processes. An AC has pervasive behavioural effects within the organization and may be used as a threat, an ally and an arbiter in bringing solutions to issues and conflicts. ACs are used in organizational politics, communication processes and power plays and also affect interpretations of events and cultural values.
Research limitations/implications
Further research on AC and governance processes is needed to develop better understanding of effectiveness. Longitudinal studies, focusing on the organizational and institutional context of AC operations, can examine how historical events in an organization and significant changes in the regulatory environment affect current structures and processes.
Originality/value
The case analysis highlights a number of significant factors which are not fully recognised either in theorizing the governance role of ACs or in the development of policy and regulations concerning ACs but which impinge on their governance contribution. They include the importance of informal processes around the AC; its influence on power relations between organizational participants; the relevance of the historical development of governance in an organization; and the possibility that the AC's impact on governance may be greatest in non‐routine situations.
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Anne Loft, Christopher Humphrey and Stuart Turley
IFAC, a Swiss‐registered non‐governmental organization, is emerging as an important international (auditing) standard setter amongst a powerful group of regulators, including the…
Abstract
Purpose
IFAC, a Swiss‐registered non‐governmental organization, is emerging as an important international (auditing) standard setter amongst a powerful group of regulators, including the World Bank, the International Organisation of Securities Commissions (IOSCO) and the European Commission (EC). The purpose of this paper is to focus on the changing governance and accountability structures within IFAC, the way such changes are shaping, or re‐shaping, its “public interest” commitments and the resulting strategic implications for processes of auditor regulation and public oversight in the global financial arena.
Design/methodology/approach
The material and analysis presented in the paper derives from an extensive review of official reports, consultation documents and related responses, a range of other information available on IFAC's web site (www.ifac.org) or those of other key regulatory players in the global financial arena.
Findings
The paper analyzes how IFAC is succeeding as an international standard setter with an established place in the global financial infrastructure. From analysis of the recent establishment of a Public Interest Oversight Board (PIOB) and the changing nature of representation on IFAC's Public Interest Activity Committees (PIACs), the paper reveals a growing reliance on governance by experts together with a growth in influence of the large, multinational accounting firms. Governance of auditors has become a matter of global importance and governance structures are being reconfigured.
Practical implications
By highlighting the changes that have taken place within IFAC's governance system, the paper establishes the importance for public policy of further study and debate concerning the nature and practical operation of such a system, particularly given IFAC's position within a complex but developing global governance arena.
Originality/value
IFAC is becoming an integral player in global financial governance processes and yet has not been subject to any substantial academic accounting research. This paper seeks to rectify this by focusing on the structures and processes underpinning both the development of IFAC's International Standards on Auditing (ISAs) and its own global strategy for advancement.
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It is in the context of the huge (but largely unaccountable) impact of accounting and accountants that the demise of Arthur Andersen and the financial scandals of the past few…
Abstract
It is in the context of the huge (but largely unaccountable) impact of accounting and accountants that the demise of Arthur Andersen and the financial scandals of the past few years need to be seen. These scandals raise questions of independence and the role of the audit industry in alerting investors, employees, suppliers, customers and the general public to the realities of corporate wrongdoing and weakness. This paper introduces a Special Issue that offers a counter-hegemonic story, pointing out that things can be different and better in substantive ways, that auditor independence and integrity require more substantive thinking and analysis than simple re-arrangements of regulatory institutions or calls for superheroes who can transcend pressures to abet crime. After reviewing the contents of the various contributions to this Special Issue, the paper makes some brief comments about possible solutions to the problem of independence of audits and suggests a focus on audit, not auditor, independence.
The purpose of this paper is to introduce the theme of this edition and to draw out the issues raised by the papers.
Abstract
Purpose
The purpose of this paper is to introduce the theme of this edition and to draw out the issues raised by the papers.
Design/methodology/approach
The editorial provides a context for the subject and examines some of the issues in auditing that have developed over the period since Journal of Applied Accounting Research (JAAR) was first published.
Findings
The editorial highlights the difficulty with some academic research and calls for a wider remit in auditing and accounting research in line with JAAR's editorial policy.
Originality/value
The editorial raises issues which are relevant both to academic and practitioner accountants and allows the reader to consider what research work may be possible and is required.