Michael Power
- Published in print:
- 1999
- Published Online:
- October 2011
- ISBN:
- 9780198296034
- eISBN:
- 9780191685187
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198296034.001.0001
- Subject:
- Business and Management, Finance, Accounting, and Banking, Organization Studies
Since the early 1980s there has been an explosion of auditing activity in the United Kingdom and North America. In addition to financial audits there are now medical audits, technology audits, value ...
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Since the early 1980s there has been an explosion of auditing activity in the United Kingdom and North America. In addition to financial audits there are now medical audits, technology audits, value for money audits, environmental audits, quality audits, teaching audits, and many others. Why has this happened? What does it mean when a society invests so heavily in an industry of checking and when more and more individuals find themselves subject to formal scrutiny? This book argues that the rise of auditing has its roots in political demands for accountability and control. At the heart of a new administrative style, internal control systems have begun to play an important public role and individual and organizational performance has been increasingly formalized and made auditable. The author argues that the new demands and expectations of audits live uneasily with their operational capabilities. Not only is the manner in which they produce assurance and accountability open to question but also, by imposing their own values, audits often have unintended and dysfunctional consequences for the audited organization.Less
Since the early 1980s there has been an explosion of auditing activity in the United Kingdom and North America. In addition to financial audits there are now medical audits, technology audits, value for money audits, environmental audits, quality audits, teaching audits, and many others. Why has this happened? What does it mean when a society invests so heavily in an industry of checking and when more and more individuals find themselves subject to formal scrutiny? This book argues that the rise of auditing has its roots in political demands for accountability and control. At the heart of a new administrative style, internal control systems have begun to play an important public role and individual and organizational performance has been increasingly formalized and made auditable. The author argues that the new demands and expectations of audits live uneasily with their operational capabilities. Not only is the manner in which they produce assurance and accountability open to question but also, by imposing their own values, audits often have unintended and dysfunctional consequences for the audited organization.
Ralf Ewert
- Published in print:
- 2004
- Published Online:
- January 2005
- ISBN:
- 9780199260621
- eISBN:
- 9780191601668
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199260621.003.0010
- Subject:
- Economics and Finance, Financial Economics
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 ...
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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.Less
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.
Asish K. Bhattacharyya
- Published in print:
- 2016
- Published Online:
- December 2016
- ISBN:
- 9780199469321
- eISBN:
- 9780199087532
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199469321.003.0013
- Subject:
- Business and Management, Corporate Governance and Accountability
This chapter examines the role of the statutory auditor and internal auditor in corporate governance. It reviews the literature to understand the factors that determine the quality of external audit ...
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This chapter examines the role of the statutory auditor and internal auditor in corporate governance. It reviews the literature to understand the factors that determine the quality of external audit (hereafter audit quality). Most debated issues in the context of auditors’ independence are audit tenure and rendering of non-audit services by the auditor. Research results support the view that increased exposure of auditors to liabilities results in increased accounting conservatism. There is no conclusive evidence that ‘revolving door’ practice impairs auditor’s independence. It has been stated that close relationship of the auditor with independent audit committee directors improves perceived earnings quality. The chapter discusses the audit reforms introduced by the SOX in USA and audit reforms introduced in India by the Companies Act 2013 and revised SEBI code of corporate governance (revised clause 49 of the Equity Listing Agreement).Less
This chapter examines the role of the statutory auditor and internal auditor in corporate governance. It reviews the literature to understand the factors that determine the quality of external audit (hereafter audit quality). Most debated issues in the context of auditors’ independence are audit tenure and rendering of non-audit services by the auditor. Research results support the view that increased exposure of auditors to liabilities results in increased accounting conservatism. There is no conclusive evidence that ‘revolving door’ practice impairs auditor’s independence. It has been stated that close relationship of the auditor with independent audit committee directors improves perceived earnings quality. The chapter discusses the audit reforms introduced by the SOX in USA and audit reforms introduced in India by the Companies Act 2013 and revised SEBI code of corporate governance (revised clause 49 of the Equity Listing Agreement).
