REGULATORS VS AUDIT PROFESSION

  Anne Loft
Lund University, Sweden, & IAAER
Regulating the Audit Profession: “Between the Idea and the Reality
Lies the Shadow”
The focus of this contribution is on the relationship between
regulators and the audit profession, one which has
acquired a multilevel character in a world where national regulatory
oversight of audit occurs within governance
structures dominated by international standards, international
regulators and global audit firms. An irony of audit
quality appears to be that international regulatory efforts to make
the audit process more standardised may have had
the effect of reducing the quality of audit outcomes as ‘form’ becomes
more important than substance at the instance
that there is national oversight.
Here it is argued that more attention should be given to understanding
the domain in which professional auditor
judgement, and in particular professional scepticism is being (or not
being) exercised. There are clearly issues of
confidentiality, but could not the profession be more open to ‘on the
ground’ academic research on these matters?
This could benefit insiders, and at the same time lift some of the
‘shadow’ for outsiders who know about the ‘idea’ but
not the ‘reality’? Related to this the profession could consider
adopting a more proactive stance to reform, focusing
on such issues as intellectual integrity and innovation in audit -
instead of the current fire fighting against EU proposals
for further regulation.