DOI: 10.5176/2251-1997_AF19.262
Authors: Dr. Mohammed Sajid Bashir
Abstract: Accountants and Auditors have dominated the big four firms who have been routinely involved in corporate scandals, hence producing low level quality audits. An auditor ensures that society will be comfortable by providing a “true and fair view” and not misleading. Stakeholders have lost confidence due to the continuing rise of corporate scandals which have been provided with a clean audit report, such as Carillion, BHS, Conviviality, Quindell, Aero inventory,Tesco, BT, Rolls Royce and many others. These companies have all been audited by the big four.These firms have collected huge fees and yet delivered very little of public value to stakeholders
The advent of global corporate collapses has brought scholarly attention to the issues of audit expectations gap (AEG) and the actual role of the auditor. Prem Sikka’s critique of the lack of efficient performance evaluation systems for auditors points out the extent of the damage misleading audit reports could cause in financial markets especially the link of corporate collapses. By using a constructivist approach which enables the researcher to adopt practical problem solving initiatives, this assessment involves a diversity of cultural assessments within AEG in diverse cultural contexts namely UK & Singapore and India.
Several studies have confirmed the existence of the gap in the UK, Singapore & India, and other developed countries, as user groups and the public have continuously criticised auditors for not doing enough to detect and report frauds in organizations. In addition to the examination of fraud detection and reporting as part of my research, I will also incorporate and provide a significant amount of understanding into the different characteristics of audit reports in different countries and those who use them – this being the cultural feature to my PHD contribution.
In my research, I will seek a comparison of UK, Singapore and, India. These countries contain differences in their accounting policies, for example, Singapore carries greater state intervention of corporate governance. In October 2014, Singapore’s parliament passed over 200 amendments to the Companies Act, and in April 2015, the Accounting and Regulatory Authority announced numerous legislative changes. Corporate governance influences the audit disclosure practices for example, and the accounting rules can thus be open to interpretation leading to wider
expectations gap. The interpretation aspect of this audit procedure forms part of the Audit expectation gap in the literature I wish to explore as I believe that this a significant area in which the widening expectations gap exists. Further and more importantly with regards to my research question, these countries have adopted different accounting systems, and it is with this in mind that I am able to examine their cultural differences.
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