Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.3/239774

Title

The market for financial report audits: regulation of and competition for auditor independence

Author(s)

Houghton, Keith A.;  Jubb, Christine A.

Abstract

The independence of auditors and the quality of financial report audits generally are rarely tested except in circumstances of corporate failure when alleged sub-optimality is present. Often auditors have good defences as to their expertise or competency, but rarely do they have equally convincing defences for the independence of their audit. A major issue for the regulation of auditor independence is that the threats to independence are often subtle and difficult to measure. This paper argues that firms undertaking financial report audits need to be transparent and competitive in respect of auditor independence. Two models that adopt this premise are proposed.

Publication type

Journal article

Source

Law and Policy, Vol. 25, no. 3 (Jul 2003), pp. 299-321

Publication year

2003

FOR Code(s)

1602 Criminology;  1605 Policy and Administration;  1801 Law

Keyword(s)

Auditing quality;  Auditor independence;  Corporate failure

Publisher

Blackwell

ISSN

1467-9930

Publisher URL

http://dx.doi.org/10.1111/j.1467-9930.2003.00152.x

Copyright

Copyright © Blackwell Publishing Ltd 2003.

Additional information

This paper draws in part on a submission by Keith Houghton to the Australian Parliamentary Committee Inquiry into Auditor Independence.

Peer reviewed