Whistle-blowing by external auditors: Seeking legitimacy forthe South African Audit Profession?
Accounting Forum 05/2013; In Press. DOI: 10.1016/j.accfor.2013.04.007
tAuditing is often cited as playing an important role in managing agency-related costs and,accordingly, being integral to the sound functioning of capital markets. There may, how-ever, be more to the attest function than a technical rational practice. By virtue of relyingheavily on claims to technical expertise, professionalism, prudential judgement and pub-lic confidence, auditing is both a source of legitimacy for organisations and, paradoxically,dependent on claims to legitimacy for its continued existence. From this perspective, recentregulatory developments, purportedly enacted to increase arms-length control over theprofession, may not only be about improving perceived audit quality and practice but alsoabout ensuring continued faith in the well-established ‘rituals’ of the assurance function. Areporting duty imposed on South African external auditors, akin to whistle-blowing, is usedas a case study to explore this perspective. In doing so, this paper contributes to the scantbody of interpretive research on auditing, simultaneously offering one of the first insightsinto auditing regulation from an African perspective
Accounting Auditing & Accountability Journal 06/2014; 27(5):834-862. DOI:10.1108/AAAJ-11-2012-1154 · 1.10 Impact Factor
- "A source of confidence in the audit profession The internalisation of the reporting requirement has important implications for confidence vested in the audit profession (Maroun and Solomon, 2014). As a source of whistle-blowing, which has the potential to bring otherwise unknown irregularities into the public domain, users regarded the RI provisions as material source of value for stakeholders (U1; U8) particularly due to perceived gains in terms of corporate transparency and accountability (U13): At the end of the day, shareholders have a right to know what is going on at companies. "
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ABSTRACT: Purpose – The purpose of the paper is to examine the extent to which there is shared meaning of the concept of auditor independence between the three major groups of parties on the demand and supply sides of the audit services market – auditors, financial report preparers and financial report users. Design/methodology/approach – The paper utilises the measurement of meaning framework (semantic differential analysis) originally proposed by Osgood et al. in 1957. The framework is used to investigate the extent to which there is shared meaning (agreement in interpretations) of the independence concept, in response to alternative audit engagement case contexts, between key parties to the financial reporting communication process. The study's research data was collected in the period March 2004-May 2005. Findings – Findings indicate a robust and stable single-factor cognitive structure within which the research participants interpret the connotative meaning of the auditor independence concept. An analysis of the experimental cases finds similarities in connotations (interpretations) of an audit firm's independence for the participant groups for most cases, with the exception of cases involving the joint provision of audit and non-audit (taxation) services. Research limitations/implications – The usual external validity threat that applies to experimental research generally applies to the study. That is, the results may not be generalisable to settings beyond those examined in the study. An important implication of the study is that it emphasises the continuing problematic nature of the joint provision of audit and non-audit services, even in situations where the non-audit services comprise only traditional taxation services. Originality/value – The study is the first to examine the concept of auditor independence by means of the Osgood et al. measurement of meaning research framework using, as research participants, the three major groups on the demand and supply sides of the audit services market.Managerial Auditing Journal 01/2012; 27(1):5-40. DOI:10.1108/02686901211186081
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ABSTRACT: In the aftermath of numerous corporate scandals and, more recently, the global financial crisis, the issue of audit quality is particularly relevant. Increasingly, numerous jurisdictions are relying on more exogenous forms of control over the audit profession in the interest of improving the quality of audit engagements and the reliability of audit reports. The purpose of this research is to examine the case for a form of mandatory whistle-blowing by South African auditors. Using an interpretive approach, this paper explores the association between a complementary reporting duty and notions of audit quality, recommending that a requirement for auditors to bring certain transgressions to the attention of an appropriate regulator can be a consideration for policy makers. At the same time, the research adds to the existing corporate governance literature by providing one of the first interpretive accounts of audit quality and reporting in a non Anglo-Saxon setting.Accounting Forum 04/2014; 39(1). DOI:10.1016/j.accfor.2014.03.002
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