International Journal of Auditing最新文献

Law entrusts auditors to conduct statutory audits. They fulfil a societal role in providing an opinion on the truth and fairness of the financial statements of audited entities and reducing the risk of misstatement. The purpose of an audit is to enhance the credibility of financial reports prepared by management (Watts & Zimmerman, 1986). Thereby, audits contribute to financial stability, trust and market confidence in the economy by protecting investors from agency risk, which in turn reduces the cost of capital for companies (European Commission, 2010). To fulfil this function, auditors need to provide an adequate service quality. According to the generally accepted definition of DeAngelo (1981), audit quality is the market-assessed joint probability that an auditor will discover material misstatements (auditor competence) and report them (auditor independence). This definition stresses that providing a high factual audit quality is insufficient but that users must also perceive audit quality as appropriate. Accounting scandals like Carillion, a UK construction and facility services company, or Wirecard, a German fintech company, raise public suspicion of auditing failures and result in regulatory initiatives, which seek to improve audit quality.

In the UK, the regulatory response mainly focused on expanding the prohibition of non-audit services (NAS) by audit firms (Department for Business, Energy, & Industrial Strategy, 2021). The provision of NAS to a public-interest entity (PIE) audit client is now limited to services regarding legally required reports and audit-related services (FRC, 2019). Moreover, the Big 4 audit firms have to operationally separate their audit and NAS practices by 30 June 2024 (FRC, 2020). The latter should ensure a focus on audit quality and protect auditors from influences from the NAS practice. The UK regulator even considered an audit-only firm approach, which would have resulted in a spin-off of UK audit firms' consulting arms (Marriage, 2018). The German legislator, who originally made use of the European Union (EU) Member State option to allow certain tax and valuation services from the blacklist of prohibited NAS, just recently reversed this decision in response to the Wirecard scandal. More importantly, Germany significantly increased the existing liability caps in case of negligent misconduct. In audits of PIEs, auditor liability is now unlimited in cases of gross negligence. The EU also considers eliminating or setting more appropriate liability caps (Council of the European Union, 2021).

From a theoretical point of view, the joint provision of audit and NAS exerts opposing effects on audit quality, and the overall impact remains unclear. The provision of NAS to audit clients may improve auditor's ability to detect material misstatements through knowledge spillovers (Arruñada, 

The paper advocates a ‘super-audit’ that assesses the company's future and what that says about the share price or another valuation. Most audit ‘failures’ relate to an assessment of the future whether that be going concern issues, impairments, long-term contracts, provisions, likely changes in the business environment and so forth. The paper suggests a focus on improving the auditor's skills in assessing the future and the leverage of such skills to look at market value added and the share price as a service to the investment community and those who rely on share prices being fair and reasonable. The super-audit report becomes akin to an investment analyst's research report and intended to be an influence on share prices. Many companies around the world currently receive little, or no, or low-quality research coverage. Inevitably many unanswered questions remain for the super-audit about appointment, remuneration, timings, legal liability, professional education and so forth. They are challenging but not insurmountable and make us think more deeply about the same challenges in relation to the conventional audit. The biggest challenge is how the auditor should progress the process of understanding the business and its future.