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    The Global Audit Profession and the International Financial...
    research summary posted May 4, 2012 by The Auditing Section, last edited May 25, 2012, tagged 01.0 Standard Setting, 01.02 Changes in Audit Standards, 01.06 Impact of PCAOB 
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    Title:
    The Global Audit Profession and the International Financial Architecture: Understanding Regulatory Relationships at a Time of Financial Crisis
    Practical Implications:

    This paper provides insight into the effect of the global financial crisis on auditors and the relationships between large international accounting firms, regulators, and standard setters. The paper summarizes a variety of reports and policy proposals related to the global financial crisis, including the number of times auditors are mentioned in each of the reports. The paper discusses issues related to bank audits, including discussion of fair value issues and going concern reports.

    Citation:

    Humphrey, C., A. Loft and M. Woods. 2009. The Global Audit Profession and the International Financial Architecture: Understanding Regulatory Relationships at a Time of Financial Crisis. Accounting, Organizations and Society 34 (6-7): 810-825.

    Keywords:
    International auditing, standard setting, auditing interpretations, global audit regulation, audit committees, accountant independence, global financial crisis, and international federation of accountants
    Purpose of the Study:

    The global financial crisis of 2008 resulted in multiple bank failings, some with little to no warning from auditors. However, auditors have largely stayed out of the discussions of what went wrong to cause the global financial crisis. This paper takes a look at the potential effects the global financial crisis could have on the auditing profession. Specifically, the paper notes: 

    • The importance of viewing auditing from a global context Regulatory response to the global financial crisis and how new regulations affect auditing
    • The potential future of bank auditing 

    This paper also explores the relationships between the international audit firms, regulators, and standard setters.

    Design/Method/ Approach:

    This paper provides the authors’ commentary on the global financial crisis and discusses some reports and policy proposals that resulted from the financial crisis.

    Findings:
    • The paper notes that although auditors have not been questioned extensively regarding their role in the global financial crisis, some new policy initiatives and reports have mentioned the auditing profession.
    • The paper suggests that in solving the global financial crisis, it is important for auditors, regulators, standard setters, and others to work together.
    • The paper notes that it is important to consider the audit profession on a global basis.
    • The authors challenge the industry to make the knowledge related to international audit practice, regulatory networks and the forces driving the same more accessible.
    Category:
    Standard Setting
    Sub-category:
    Changes in Audit Standards, Impact of PCAOB
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