Auditing with Accountability: shrinking the opportunity spaces for audit failure
In recent years a number of high-profile company failures have raised fundamental questions about the willingness and/or ability of auditors to exercise the professional scepticism necessary for the production of robust audits.
This report, co-written by Adam Leaver at the University of Sheffield and Leonard Seabrooke, Saila Stausholm and Duncan Wigan at Copenhagen Business School, examines the causes of those failures and makes a series of recommendations on how to resolve them.
The report argues that audit failure takes place within a particular configuration of economic, cultural and regulatory arrangements which create the 'opportunity spaces' for poor practice. Shrinking those opportunity spaces therefore requires a multi-dimensional response, including the structural separation of audit and non-audit functions, a more robust system of fines and the integration of a civil society voice into the reform process to prevent regulatory capture.