Auditing With Accountability

This project examines the particular configuration of economic, cultural and regulatory arrangements which foster poor practice; and offers workable policy solutions to improve the public accountability of audit.

Calculator, paper, paperclip and pen
On

Auditing With Accountability

A number of high-profile company failures have raised questions about the willingness and/or ability of auditors to exercise the professional scepticism necessary for the production of robust audits.

The problem of audit failure is a central public accountability issue because it undermines confidence in corporations. This project aims to measure the extent of such failures and their effects, providing an institutional analysis of its causes. From that analysis, we hope to develop practical recommendations for reform.

Professor Adam Leaver

Project description

In recent years a number of high-profile company failures have undermined taken-for granted trust in the financial reporting outputs of major corporations. The collapse of companies like Carillion, Thomas Cook and Wirecard raise fundamental questions about the willingness and/or ability of auditors to challenge management and exercise the professional scepticism which is essential for the production of robust, socially-useful audits. In response to these individual and aggregate failings, the Government commissioned a number of independent reviews.

The purpose of this Luminate-funded project is to build on this appetite for reform by offering a perspective that differs in scope in three fundamental respects. First, our focus is on the public accountability of auditing as a professional practice – auditing is a social utility that builds trust and legitimacy in firms and organisations which is essential for all stakeholders: creditors, shareholders, workers, suppliers, consumers and the state.  Second, we consequently focus on the accountability gap - the shortfall between what the wider public might legitimately expect auditors to do and what the audit process currently delivers. Third we are interested in the public accountability of the audit reform process itself. The history of audit reform is littered with good intentions that do not translate into effective checks on bad practice.

This funded project is led by Professor Adam Leaver, and involves collaboration with colleagues at Copenhagen Business School: Professor Leonard Seabrooke, Professor Duncan Wigan, Dr. Saila Stausholm, as well as Professor Richard Murphy who is a visiting professor at the University of Sheffield.

Key research outputs

Research activity

Invited presentations

  • Leaver, A., Seabrooke, L., Wigan, D., Stausholm, S.N., Auditing With Accountability: Shrinking The Opportunity Spaces For Audit Failure; November 2019, London.
  • Leaver, A. Auditing With Accountability: Shrinking The Opportunity Spaces For Audit Failure, presentation to Local Authority Pension Fund Forum (LAPFF) July 2020.

Staff

Professor Adam Leaver
Chair in Accounting and Society
Sheffield University Management School
The University of Sheffield
Conduit Road
Sheffield S10 1FL
A.Leaver@sheffield.ac.uk

Professor Richard Murphy
Visiting professor
Sheffield University Management School
The University of Sheffield
Conduit Road
Sheffield S10 1FL