Rules, rogues, and risk assessors: Academic responses to Enron and other accounting scandals

Ravenscroft, Sue; Williams, Peter

doi:10.1080/09638180500124889

Cited by 19 publications

(6 citation statements)

References 19 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Questions have been raised by key stakeholders of audit services as to whether the auditors have carried out their responsibilities diligently and whether the audit firms have good audit processes in place when executing audit services (Carcello, Hermanson & McGrath, 1992;Reilly, 2006;Boone, Khurana, & Raman, 2008). Accordingly, various initiatives have been undertaken by different parties that have resulted in changes and the introduction of auditing rules, regulations and standards to enhance and promote high-quality audits (Ravenscroft & Williams, 2005;Casterella, Jensen, & Knechel, 2009;Kilgore et al, 2011). For example, the International Auditing and Assurance Standards Board (IAASB) published the International Standard of Auditing, Quality Control 1 (ISQC1) that deals with a firm's responsibility for its quality control system for audits and reviews of financial statements, and other assurance and related services (Harrison, 2011).…”

Section: Introductionmentioning

confidence: 99%

People and Audit Process Attributes of Audit Quality: Evidence From Malaysia

Sulaiman¹,

Shahimi²,

Singh³

2019

MAR

View full text Add to dashboard Cite

This study seeks to add to understanding of the concept and attributes of audit quality from the perspective of those responsible for delivery audit services, the auditors, as a key constituent group in the auditing system. The study surveyed two groups of external auditors (group 1- audit partners and managerial level and, group 2 - senior auditors and junior auditors), as a basis to compare their perceptions on important of auditors and audit process attributes in achieving audit quality in practice. The study was conducted in the form of a survey, with data being gathered via questionnaire. Returned surveys from external auditors yielded a 37% response rate. Overall, top 5 highest rated attributes of audit quality reported to be most important in determining audit quality are: compliance with the International Standard Quality Control (ISCQ) 1, obtaining credible and sufficient audit evidence, technical expertise of audit team, audit work meeting the audit firms’ quality standards, and competency of the audit team. Further analysis shows that the two groups of respondents have differential views on attributes of audit quality in practice. Group 1 perceived attributes of audit quality are related to auditor’s assessment of risk and internal quality review procedures within the audit firm. In comparison, group 2 perceived auditors’ competency and compliance with relevant standards as indicators of audit quality. This study suggests differences in underlying view about attributes audit quality in practice by the two groups of auditors. Public accounting firms might be interested to understand such underlying differences so that efforts in improving audit quality in practice would be focusing on the key attributes that perceived to be important on delivery high-quality audit services. This study is significant by extending the literature on audit quality and also provides useful input to public accounting firms in improving audit quality in practice.

show abstract

Section: Introductionmentioning

confidence: 99%

People and Audit Process Attributes of Audit Quality: Evidence From Malaysia

Sulaiman¹,

Shahimi²,

Singh³

2019

MAR

View full text Add to dashboard Cite

show abstract

“…Accounting education has continued to be the subject of debate in the post-Enron environment; for example, seeDiamond (2005),Ravenscroft and Williams (2005), andCooper et al (2005). Although the emphasis within these commentaries is ethics, each identifies the importance of developing students' critical faculties.…”

mentioning

confidence: 97%

Students' Approaches to Learning

Duff¹,

McKinstry

2007

Issues in Accounting Education

108

View full text Add to dashboard Cite

show abstract

“…Firms provide the detailed company accounts that constitute the major part of these information flows, and they have had increasing success in co-opting ostensibly independent corporate watchdogs to sign off aggressively presented accounts (e.g., Ravenscroft and Williams 2005) Such commercial interests manifest themselves in the temptation to create a wilfully duplicitous picture of the firm's dynamic financial position. In Lawrence Revsine's sugar-coated phrase (1991), it is all about 'selective financial misrepresentation'.…”

Section: The Tendencies and Counter-tendencies Of Financializationmentioning

confidence: 99%

Investigating the potentially contradictory microfoundations of financialization

Watson

2009

Economy and Society

View full text Add to dashboard Cite

The existing academic literature on financialization points to multiple instances in which firms attempt to demonstrate the vitality of their stock market position in ways which ultimately prove to be self-harming. I demonstrate, in the first instance as a matter of immanent logic, that these actions are linked to the interplay of contradictory tendencies in the microfoundations of financialization.Under conditions of financialization, firms create additional sources of credit to capitalize their productive activities by driving their stock price into greater increases than the market average, thereby generating capital gains. Yet, the more it becomes public knowledge that the financing tricks used to inflate the stock price provide no productive benefit to the firm, the more that it would seem to create incentives for fund managers to hold portfolios that replicate the stock market as a whole. In this way, they will minimize their exposure to financial misrepresentation. Such a stance undermines financialized business models, but it does in any case conform to fund managers' basic theoretical training, which revolves around the logical demonstration that an individual stock cannot systematically out-perform the market average. I review the available empirical studies of fund manager decision-making to show that they find against the existence of a simple performativity loop operating between finance theory and fund manager behaviour. However, on many points the empirical evidence does confirm the theoretically-derived conclusion concerning the potentially contradictory microfoundations of financialization. Fund managers often do act in a way which is consistent with finance theory's core claim that an index-tracking strategy represents the only equilibrium portfolio, even if this is only rarely as a result of the direct performativity of the theory.

show abstract

Rules, rogues, and risk assessors: Academic responses to Enron and other accounting scandals

Cited by 19 publications

References 19 publications

People and Audit Process Attributes of Audit Quality: Evidence From Malaysia

People and Audit Process Attributes of Audit Quality: Evidence From Malaysia

Students' Approaches to Learning

Investigating the potentially contradictory microfoundations of financialization

Contact Info

Product

Resources

About