Search Results

In 1994, Anthony Hopwood wrote about the ‘very active politics’ in the emergent international arena in accounting and auditing, analyzing the institutional interfaces between the international regulators and the international accounting profession. In doing this he touched on a set of relationships and arrangements that over the subsequent fifteen years have developed into what is now widely recognized as the New International Financial Architecture (NIFA). In terms of global accounting regulation, the International Accounting Standards Board (IASB) has attracted significant research attention. However, far less attention has been paid to the global audit regulatory arena and, in particular, to the International Federation of Accountants (IFAC), which has standard setting boards responsible for international standards on auditing practice, ethics, and education. Responding to this gap, this chapter seeks to assess the contemporary pertinence of Hopwood's (1994) observations and reflections, using empirical and theoretical insights from the rapidly growing literature in the global governance field. What emerges in the field of global auditing regulation is a more complex and interlocking set of relationships than the ‘interfaces’ and ‘lobbying activities’ that Hopwood identified as taking place between regulators and the profession. The chapter describes this as a form of ‘coordinated network governance’ which is binding together international regulators and the international profession in an ongoing project attempting global governance in the audit arena.

Despite reservations voiced by the scientific community, the perception that combining non-audit services (NAS) and auditing for the same client may be largely responsible for recently observed accounting and audit failures seems to have gained momentum, and currently, it appears that any auditor offering NAS to auditees automatically endangers ‘independence in appearance’. This chapter addresses the question of whether such opinions can be justified by existing research on the issue of combining NAS and auditing. While there are already some reviews of former empirical papers, there is essentially no survey of the related theoretical research and the more recent empirical work. Here, the focus is mainly on the theoretical side, which is critically reviewed and somewhat extended in Section 2 of the chapter, while Section 3 reviews and interprets some new empirical work in the light of the theories presented before. The final section presents conclusions and directions for further research; the conclusion is that there is no evidence that a simultaneous offering of auditing and NAS to the same client unequivocally and systematically impairs auditor independence, and that, in fact, there are instances where NAS are likely to enhance the quality of the audit because they increase the auditors’ capital that is at stake.

Sets out the results of the quantitative assessment of regulation inside government in the UK and refers to the detailed table of budget and staffing levels contained in Appendix 2. It offers a method for defining what is meant by the term ‘public sector’, which is then deployed to capture the whole set of central regulators of public sector bodies. The pattern of growth in staffing and budgets over a 20‐year period point to nearly exponential growth in regulation inside government, and through highly diverse forms of oversight institution that include auditors, inspectorates, ombudsman, and central agencies.

Accounting firms and auditors play a critical role in delivering transparency to capital allocation decisions involving public corporations. Although the source of financial information is the company itself, a public company in the US is required under federal securities laws to retain an independent accounting firm to audit its accounts and to certify that the company’s financial statements “present fairly, in all material respects, the financial position of the company in accordance with generally accepted accounting principles applied in the United States of America”. This chapter traces the evolution of the accounting industry, how the accounting profession operated in the late 20th century, leading to its virtual collapse in the early 2000s, and the regulatory reforms and measures aimed at assuring its recovery.

This chapter provides an outline of how to start implementing knowledge retention programs. It illustrates the uses of a risk assessment or a knowledge audit, as well as an attrition profile and social network analysis, to identify where turnover and lost knowledge will have the greatest impacts. These steps are necessary to build the business case for investing in the implementation of a variety of knowledge retention initiatives. In addition, change management strategies are outlined to address the cultural barriers and resource constraints that can threaten to undermine the implementation process.

This chapter reviews recent behavioural studies of the effects of regulation on earnings management and accounting choice. It examines the impact of financial reporting, auditing, and other corporate governance regulations on the beliefs and choices of managers, auditors, and corporate directors. Behavioural studies contribute to the broader literature by shedding light on potential unintended consequences and overall efficacy of proposed regulations, revealing the roles of specific actors and the motives behind reporting choices, and demonstrating what determines managers' preferences for different earnings management methods (both real and accruals based). The chapter also discuss areas that have received less attention that provide promising avenues for future behavioural research involving regulation, earnings management, and accounting choice.

Investors, creditors, government officials, and others require information to evaluate companies’ economic position, performance, and prospects. This chapter examines the usefulness of financial accounting statements and their limitations in providing this information, particularly measures of economic values. The essential features of the traditional market-transaction, cost-based accounting system, and the benefits and costs of fair-value accounting and of audits and attestations by independent public accountants (IPAs) are described and evaluated.

This chapter sums up the key findings of this study on the performance audit of SAIs in Great Britain, Sweden, The Netherlands, Finland, and France. It summarizes the answers to the questions in previous chapters, which include the nature of performance audit work, auditing criteria, auditing methods, and auditing craft. It speculates on the future of performance audit and identifies certain strategic choices and constraints that may be faced by those who wish to develop performance audit further.

This chapter examines some of the more general implications of a society which is increasingly committed to observing itself through various kinds of auditing practice. It specifically describes the territory of social theory and the themes of democracy, surveillance, trust, and risk. The discussion starts with a consideration of the democratizing potential of audit. It also converses that the audit explosion reflects a distinctive response to the need to process risk. The theme of the ‘audit society’ indicates where the audit explosion may be leading and directs to a set of tendencies and potentials. Presently, audit operates in a regulatory space where regulators and politicians do not wish to be encumbered by systemic doubts about audit; they need to be reassured that it works or can be made to work better.

This chapter considers a major phenomenon in the regulatory state, which is all too easily glossed over — the role of ‘bureaucratic regulation’ of public bodies by other public bodies. A prime concern is the instruments of the so-called ‘audit culture’ which has flourished in the UK under successive governments. The chapter gives an insider's view of the role of the National Audit Office in scrutinizing the workings of the regulatory reform agenda, with particular reference to the fashionable tools of impact assessment and risk-based evaluation. In so doing, it emphasizes the empowering of parliamentary scrutiny through reports on (lack of) value for money to the House of Commons Public Accounts Committee. It also emphasizes the importance of the work in terms of the economic footprint of regulation.

This chapter explains the objective of this book, which is to study the practice of performance audits and relate it to contemporary development public management. This book evaluates audits carried out by Supreme Audit Institutions (SAI) in Great Britain, Sweden, The Netherlands, Finland, and France. It highlights the need for more publications that offer sustained and independent analysis of the audit process and stresses the importance of exploring the connections between performance auditing and public-sector management reform.

This chapter provides an overview of what is actually being done by SAIs. It compares the audit topics covered by the SAIs in Great Britain, Sweden, The Netherlands, Finland, and France in order to understand the trends and changes in the focus of performance audit across SAIs. It also highlights the independence of choice that SAIs can exercise and discusses varying strategies that individual SAIs appear to have adopted in order to select their portfolios of study.

This chapter discusses the criteria used by SAIs in performance audit of public management. The general basis of public auditing is the three E's: economy, efficiency, and effectiveness. However, more detailed or more specific criteria may be used to reflect the desired result of the audit. This chapter suggests that there may be philosophical grounds for arguing for the pursuit of precise criteria for the judgement of government policies, programmes, and organizations.