Sixty-Five Years of Auditing Europe

International Journal of Disclosure and Governance, 2013

In September 2011, the European Union Commissioner Michel Barnier explained that there are weaknesses in the way the audit sector works today and the crisis highlighted them . Such weaknesses were not detected for the fi rst time: a few years earlier the problems of the audit sector emerged when Enron collapsed and the chicanery of its auditor Arthur Andersen was revealed to the markets. Since then, auditors and audit fi rms, namely, the Big Four have been subject to the long standing debates not only in the academic world but also in a number of European laws and regulations. This article examines the role of auditors in the global fi nancial crisis of 2008 and whether they actually failed in their role.

SSRN Electronic Journal, 2014

We provide a comparative overview of the process of implementation, harmonization and stabilization of public oversight systems for statutory auditors across the European Union (EU) after Directive 2006/43/EC. We build on institutional change theory to identify potential determinants as to why some countries still lag in this harmonization process. Oversight systems are a key institutional factor to guarantee the quality of financial information, essential to maintain investors' confidence and deep and stable capital markets. Thus, the harmonization of these systems has long been an objective of the EU. Our analyses serve to identify, analyse and compare how EU countries have incorporated European-wide requirements into their national legal systems. Particularly, we study: (1) basic characteristics of the system and bodies for public oversight, (2) organizational structure, (3) financing (4) transparency, (5) supervisory, and (6) disciplinary mechanisms. We show that significant diversity still exists across systems and that both the incentives for institutional change and the distance between pre-existing systems and the Directive are important explanatory factors of the achieved level of harmonization.

Suma de Negocios, 2021

Este artículo tiene como objetivo extraer conclusiones sobre el impacto de la reforma europea de auditoría (REA) sobre el papel y la independencia de los auditores externos desde la perspectiva de estos profesionales en Portugal. Las medidas implementadas por REA fueron seleccionadas para su análisis con el fin de aclarar y definir mejor el papel del auditor, reforzar la independencia profesional y el escepticismo del auditor y aumentar la supervisión de los auditores. Los datos fueron recolectados a partir de un cuestionario enviado a los auditores (ROC), resultando en una muestra de 89 profesionales. Los hallazgos apuntan a niveles en general superiores al desacuerdo para las diferentes medidas implementadas por la REA, que se amplían en cuanto a las respuestas de los auditores que consideraban fundamental la introducción de la REA. Además, los hallazgos muestran que el papel que desempeña la ROC en la sociedad se destaca, según ellos, como el tema más relevante relacionado con la...

Current Issues in Auditing

: On October 13, 2010, the European Commission (EC) launched a broad con-sultation on the role of statutory audit as well the wider environment within which audits are conducted. In the wake of the fi nancial crisis, the EC asked whether the role of auditors can be enhanced to mitigate any new fi nancial risk in the future. The fi nancial crisis also highlighted certain weaknesses in the audit sector that need to be explored further. This audit-related work is part of the EC's effort to learn from the crisis and reform the fi nancial sector. In particular, the EC was keen to discuss whether audits provide the right information to all fi nancial sector participants, whether there are issues concerning audit fi rm independence, whether there are risks linked to a concentrated market, whether supervision at a European level might be useful, and how to best meet the specifi c needs of small-and medium-sized businesses. The deadline for responses to the consultation was December 8, 2...

Journal of Contemporary European Research, 2017

The European Court of Auditors (ECA), established in 1977, is the external auditor of the EU budget. It was given full EU institutional status in 1993. The Treaty of Amsterdam reaffirmed its independence and extended its audit powers. Based in Luxembourg, it employs around 900 people, of whom less than half are auditors. The ECA is meant to carry out its audit tasks in close cooperation with the supreme audit institutions (SAIs) at the national level. Through its work, it shapes and adopts new audit standards that guide its practice. It is member of International Organisation of Supreme Audit Institutions (INTOSAI) (1953), a forum that brings together professional and technical experts worldwide through working groups and task forces. Drawing on Oliver Buntrock’s notion of ‘micro-institutionalisation’, this article examines how and why the ECA formally engages in standard-setting at the international level. Drawing on primary documents and interviews, it analyses socialization proce...

Journal of Governance and Regulation, 2016

Auditors used to serve the interest of the shareholders only. However, there have been significant changes in terms of auditors' role and their function. Auditors are now expected to verify financial statements, but at the same time give an assurance regarding the financial sustainability of the entity. Regarding the latter role, audit firms provide consulting services, including risk assessment and management services. However, the law does not assign the latter role to external auditors. This situation results in an expectations gap in relation to both the role of the auditors and the scope of the external auditing. In addition, the growing economic importance of consulting and the long years of auditor tenure is likely to impair auditor independence. This paper submits that the new form of auditing is not problematic but creates issues. First, the expectations between the users of the financial reports and auditors are wider. Second, auditors' independence is damaged due to the long years of auditor tenure and dependence of non-audit fees generated from consultancy services that not related to audit. The recent law reforms issued by the European Commission has brought some important provisions in terms of filling the expectations gap, reinforcing auditor independence and reducing the familiarity threat. EU's relatively strict rules on provision of non-audit services and audit firm rotation are expected to have an important impact in the audit market. A critical analysis of the new EU law is submitted with some policy recommendations.

European Business Review, 2007

To examine the enabling legislation of European Union (EU) member country supreme audit institutions (SAIs) for their accountability to parliament and independence from the executive arm of government.

Prawo Budżetowe Państwa i Samorządu

In the light of the standards of the International Organisation of Supreme Audit Institutions (INTOSAI) the basic principles for the functioning of the supreme audit institution should be laid down in a constitution which guarantees their stability. In this respect, it is proposed that constitutional provisions should lay down the basic principles for the functioning of supreme audit institutions, including, inter alia, the procedure for their establishment, the procedure for the appointment and dismissal of chairpersons and members of the institution 1 Article prepared under a grant funded by the National Science Centre (Poland) 2018/02/X/HS5/00047-"Najwyższe organy kontroli w systemach konstytucyjnych państw członkowskich Unii Europejskiej". Maciej Serowaniec 10 concerned, basic powers and auditing responsibilities, reporting obligations and institutional guarantees of the functional and organisational independence of the authority. This article aims to analyse the constitutional regulations of the EU Member States to guarantee the independence of Supreme Audit Institutions.

Public Money & Management, 2020

This paper compares the level of harmonization in local government audit in 18 European Union member countries, as well as the situation in England and Switzerland. It presents a classification of audit systems based on who carries out audits, their frequency, the types of audit, and the auditing standards adopted. The different audit models are analysed in relation to each country's administrative systems. The results provide important insights for scholars, auditors, politicians and standard-setters, showing that harmonization in auditing is far from being achieved in Europe. IMPACT The paper offers interesting insights into the audit systems of European countries, revealing that the differences between them mean that the European Commission cannot obtain high-quality comparable data. Building a strong audit system is integral to reducing the mismanagement of public funds and to setting common European policies. The authors reveal the countries which need to update and standardize their accounting systems at the local and regional levels. In addition, the authors explain why they are calling for a wider adoption of performance auditing in Europe.

Accounting History, 2017

Mr. Roel Jannsen, an economics and financial journalist, has written an interesting book on Supreme Audit Institutions (SAIs). In essence, the book is a compilation of interviews of eight current and former heads of audit institutions from across the world. The book is unique in that it brings us the opportunity to 'travel' around the world, visiting the SAIs of different countries. The lessons from the personal experiences of these SAIs' leaders are, indeed, what makes the book particularly interesting. The book is well written, easy to read and fairly short, consisting of 103 pages. Excluding the Introduction, the book contains 8 sections pertaining to the SAIs of Tunisia, Austria, South Africa, the Philippines, Estonia, the United States, Uganda and Iraq. Besides the opinions of the heads of the SAIs, in each section we find a summary of the key statistics and some additional information about each country (e.g., population, GDP) and a brief description of the history of the institution. It also contains some biographical details (and a picture) of the SAIs' leaders. Information about how the local SAI interacts with the International Organization of Supreme Audit Institutions (INTOSAI) is included as well. Given the topic, the approach and the structure of the book, it will be of interest to the general public. In the following, I will briefly discuss the salient points of the different sections and conclude with some thoughts. The prologue 'The pillars of integrity' sets the scene. The history of the Netherlands Court of Audit is used to introduce the key theme of the book: the role of SAIs in today's society. The prologue explains the vital role of SAIs in the accountability of governments, in the efforts to enhance governance in government institutions and in the disclosure of corruption cases. It also introduces three underlying topics discussed throughout the book: the evolving nature of SAIs and their different roles depending on the jurisdiction; the importance of individual leadership; and the current challenges of SAIs. The prologue closes with a commentary about INTOSAI's assistance to national SAIs. The section 'La Cour Est Dans Mon Coeur' focuses on the Tunisian Court of Auditors and its president Faiza Kei. The biographical information about the president underscores her involvement in women's rights movements. Discrimination of women in decision-making was one of the issues she paid attention to during her time in office. In Kei's view, the main duties of the Tunisian SAI are to: act as a watchdog of the political process; perform performance audits; and to fight against corruption. The section includes a brief discussion of the profound effect that the changes in government caused by the Jasmine Revolution in 2011 had on the SAI's role and activities. The section 'Accountability, Transparency and Independence' discusses the Austrian Rechnungshof and the role of Josef Moser, its current president. The recent financial crisis in 695106A CH0010.1177/1032373217695106Book reviewBook review book-review2017