Investigating the role of reportable irregularities in South African audit

This thesis explores the role of the statutory requirement for South African auditors to report certain irregularities to an independent regulatory body. Detailed interviews with some of the country’s leading minds in auditing and corporate governance illustrate how a whistle-blowing duty impacts the functioning of quality control systems. Although the reporting requirement does not result in a paradigm shift in audit practice, it is perceived by some stakeholders as contributing to the scope and relevance of audit reporting. Enacted to enhance corporate transparency, accountability and compliance with laws and regulations, it also becomes an important source of pragmatic, moral and cognitive legitimacy for the audit profession. Motifs of disciplinary power reinforce claims to legitimacy by creating a valid expectation of active reporting by auditors in the spirit of promoting effective whistle-blowing. There is, however, no guarantee that every irregularity is reported. The opacity of the audit process allows the practical limitations of the reporting requirement to be decoupled from symbolic displays that reassure stakeholders that external regulation is reforming audit after confidence in its self-regulatory franchise has been eroded by prior scandals. This is not to say that the reportable irregularity provisions are irrelevant. What these findings highlight is that the plurality of external regulation gives rise to varied (and at times conflicting) views on arms-length control of the profession. <br/>In this way, the research adds to the auditing literature by avoiding the mainstream approach of using inferential testing to make an economic case for external regulation. Instead, an interpretive technique highlights the relevance of powerful social and institutional forces shaping regulatory practice. Critical analysis of an example of a recently amended reporting requirement also provides an interesting case study for exploring real-world issues when it comes to the application and effect of external regulation, simultaneously offering evidence in support of the social construction of audit practice, quality control and credibility theorised by leading institutional auditing researchers such as Humphrey and Power. The research is also the first to examine the role of a whistle-blowing duty for South African auditors, despite the statutory requirement dating to the 1950’s. This is not only useful for local practitioners and academics seeking better to understand the legal duty: by contributing to the scant body of critical auditing research in an African setting, this research highlights important conceptual issues which are relevant for informing the on-going debate on the role of external regulation in ensuring high quality audit practice, relevant and reliable audit reports and the continued credibility of the attest function.<br/>

Name dc:type.qualificationname

Doctor of Philosophy

Level dc:type.qualificationlevel

Doctoral Thesis

Grantor dc:publisher.institution

King's College London

Year dc:date.issued

2013

Author dc:creator

• Maroun, Warren

Advisors dc:contributor.advisor

• Solomon, Jill Frances
• Tan, Zhiyuan Simon

Language dc:language

eng

Identifier

oai:kclpure.kcl.ac.uk:studenttheses/ec96c972-6000-47d4-9bec-0c426eeb4067

OAI identifier oai:identifier

oai:kclpure.kcl.ac.uk:studenttheses/ec96c972-6000-47d4-9bec-0c426eeb4067