Financial scandals and corporate governance: what future for the audit profession in the OHADA region?

Louis Ndjetcheu

African Journal of Accounting, Auditing and Finance, 2012, vol. 1, issue 3, 281-298

Abstract: Financial scandals in western countries and in Cameroon have led the public to regain interest in debates about auditors in the area of corporate governance. This is a topic that has been widely discussed by researchers (Charreaux, 1997; Labelle and Piot, 2003). However, little research has been carried out on the relationship between its mechanisms and auditor's behaviour. Thus, when facing repetitive financial scandals, the first thing is to question that auditor's moderating role in corporate governance. The aim of this paper is to determine the auditor's effectiveness in handling agency conflicts. The analysis of a sample of 53 auditors shows that the latter seem competent; however this is not the case insofar as their independence is concerned. This situation is justified by the limitations of the OHADA legislation relating to the control over trading companies and by socio-cultural, political and regulatory factors peculiar to Cameroon.

Keywords: corporate governance; auditing; audit quality; competence; independence; agency theory; signal theory; positive theory of accounting; financial scandals; Cameroon; auditor behaviour; auditor effectiveness; agency conflicts; OHADA legislation; socio-cultural factors; political factors; regulatory factors; West Africa; Central Africa. (search for similar items in EconPapers)
Date: 2012
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