Accounting scandals are becoming perpetual in nature.They range from the ancient Mesopotamia,to the South Sea Bubble of 1720,to the famous Enron of 2001,down to Parmalat,Tesco,and Toshiba of today.The series of accoun...Accounting scandals are becoming perpetual in nature.They range from the ancient Mesopotamia,to the South Sea Bubble of 1720,to the famous Enron of 2001,down to Parmalat,Tesco,and Toshiba of today.The series of accounting scandals that have occurred in the last two decades calls for a greater concern by the accounting profession.The accounting scandals that have occurred in this 21st century alone have shown that there is a need to look beyond corporate governance in the fight against financial deception.In this paper,we argue that even in the face of the Sarbanes-Oxley Act(SOA)of 2002 and other regulations around the world that are targeted towards effective corporate governance,accounting scandals have never ceased to occur.Most of the legislations that have been passed in recent times were targeted at corporate governance,forgetting the crucial role that audit plays within the agency relationship.And whenever there is any revelation of fraudulent financial reporting,investors do not ask who are the directors,but the first question they ask is who are the auditors?Hence,there is a need to improve audit quality by approaching it from a forensic accounting perspective in order to reduce the incidence of financial statement frauds in this era of information revolution,thus restoring investors’confidence back in the financial reporting process and corporate governance.In this paper,we propose a forensic accounting paradigm as a viable option for reducing accounting scandals,since this will compliment corporate governance systems.展开更多
Palmer&Harvey(P&H)is a recent example of a UK corporate failure which raises questions about current corporate governance practice,the quality and integrity of audit reporting,and the“sugar coating”of Annual...Palmer&Harvey(P&H)is a recent example of a UK corporate failure which raises questions about current corporate governance practice,the quality and integrity of audit reporting,and the“sugar coating”of Annual Reports.P&H is but one example of UK firms currently struggling to survive,or failing.The paper presents some details about the P&H case,and then considers questions about corporate governance practice,and whether it is designed to truly safeguard the interests of stakeholders;it raises questions about conventional audit reporting,and whether it is too limited in its analysis and reporting.The paper recommends a strengthening of corporate governance guidelines and practice within the terms of the current Financial Reporting Council(FRC)review,and a wider adoption of forensic accounting practice and reporting,in part taking account of the impact of behavioural factors in management practice.A wider study is proposed to take this analysis and discussion further.展开更多
Proposed reforms to U.K.audit are reviewed from a fraud detection and prevention perspective.A holistic four-actor model that encompasses:the directors,auditor,shareholders,and the regulator,is used to frame the discu...Proposed reforms to U.K.audit are reviewed from a fraud detection and prevention perspective.A holistic four-actor model that encompasses:the directors,auditor,shareholders,and the regulator,is used to frame the discussion.Focus is drawn to the mediating role of the Audit and Assurance Policy.The paper argues that the proposed reforms have some potential to reduce the audit expectations gap.However,the problem of agency costs and the advisory nature of shareholder voting on the Audit and Assurance Policy significantly limit the possible effectiveness of the reforms from a fraud detection and prevention perspective.Suggestions for future research are made.展开更多
文摘Accounting scandals are becoming perpetual in nature.They range from the ancient Mesopotamia,to the South Sea Bubble of 1720,to the famous Enron of 2001,down to Parmalat,Tesco,and Toshiba of today.The series of accounting scandals that have occurred in the last two decades calls for a greater concern by the accounting profession.The accounting scandals that have occurred in this 21st century alone have shown that there is a need to look beyond corporate governance in the fight against financial deception.In this paper,we argue that even in the face of the Sarbanes-Oxley Act(SOA)of 2002 and other regulations around the world that are targeted towards effective corporate governance,accounting scandals have never ceased to occur.Most of the legislations that have been passed in recent times were targeted at corporate governance,forgetting the crucial role that audit plays within the agency relationship.And whenever there is any revelation of fraudulent financial reporting,investors do not ask who are the directors,but the first question they ask is who are the auditors?Hence,there is a need to improve audit quality by approaching it from a forensic accounting perspective in order to reduce the incidence of financial statement frauds in this era of information revolution,thus restoring investors’confidence back in the financial reporting process and corporate governance.In this paper,we propose a forensic accounting paradigm as a viable option for reducing accounting scandals,since this will compliment corporate governance systems.
文摘Palmer&Harvey(P&H)is a recent example of a UK corporate failure which raises questions about current corporate governance practice,the quality and integrity of audit reporting,and the“sugar coating”of Annual Reports.P&H is but one example of UK firms currently struggling to survive,or failing.The paper presents some details about the P&H case,and then considers questions about corporate governance practice,and whether it is designed to truly safeguard the interests of stakeholders;it raises questions about conventional audit reporting,and whether it is too limited in its analysis and reporting.The paper recommends a strengthening of corporate governance guidelines and practice within the terms of the current Financial Reporting Council(FRC)review,and a wider adoption of forensic accounting practice and reporting,in part taking account of the impact of behavioural factors in management practice.A wider study is proposed to take this analysis and discussion further.
文摘Proposed reforms to U.K.audit are reviewed from a fraud detection and prevention perspective.A holistic four-actor model that encompasses:the directors,auditor,shareholders,and the regulator,is used to frame the discussion.Focus is drawn to the mediating role of the Audit and Assurance Policy.The paper argues that the proposed reforms have some potential to reduce the audit expectations gap.However,the problem of agency costs and the advisory nature of shareholder voting on the Audit and Assurance Policy significantly limit the possible effectiveness of the reforms from a fraud detection and prevention perspective.Suggestions for future research are made.
