The audit crunch: reforming auditing

Abstract

Purpose

The purpose of this paper is to stimulate debates about contemporary auditing practices.

Design/methodology/approach

The paper builds a generalised theory of auditing to pose some questions about the basic auditing model, notions of audit quality and the possibility that some transactions cannot be audited in the traditional way.

Findings

It is argued that the basic auditing model is flawed since it makes auditors financially dependent on companies. The conventional approach to “audit quality” is also incomplete as it pays little attention to the organisational and social context of auditing. It also argues that as companies have diversified into new forms of investment and complex financial instruments, some transactions may be not be capable of being audited in the traditional way.

Research limitations/implications

The paper does not offer a comprehensive critique of contemporary auditing issues. Rather it is a focus on some selected issues.

Practical implications

The paper encourages reflections on contemporary practices and offers some suggestions for reforms.

Originality/value

The paper is a combination of theory, evidence and speculation on contemporary issues.

Citation

Sikka, P., Filling, S. and Liew, P. (2009), "The audit crunch: reforming auditing", Managerial Auditing Journal, Vol. 24 No. 2, pp. 135-155. https://doi.org/10.1108/02686900910924554