Related resources
Full-text held externally
Search for item elsewhere
University researcher(s)
Academic department(s)
Regulating audit quality: Restoring trust and legitimacy
Holm C and Zaman M
Accounting Forum. 2012;36(1):51-61.
Access to files
Full-text and supplementary files are not available from Manchester eScholar. Full-text is available externally using the following links:
Full-text held externally
Abstract
The global financial crisis, corporate failures and scandals in many countries raise significant questions audit quality. In the UK, the FRC took the unprecedented step of codifying audit quality in its ‘Audit Quality Framework’. We analyze the extent to which audit firms, professional bodies, and investors considered the FRC proposals sufficient for addressing concerns about audit quality. Using impression management and legitimacy as a framework to analyze stakeholder responses we go beyond audit quality drivers identified by the FRC. In contrast to the drivers identified by the FRC, our focus on transparency, expertise, professionalismand commercialization of the audit shows that FRC, audit firms and professionalbodies have mainly focused on issues which possibly do not pose a threat to the commercial interest of audit firms. Overall, our analysis shows that regulatory and professional bodies engaged in image management and the promotion of audit quality in an attempt to remedy tarnished image and augment their legitimacy and standing. In attempting to restore trust and legitimacy regulatory bodies, such as the FRC, have to reconcile complex often contradictory stakeholder demands.
Keyword(s)