Reportable irregularities and audit quality: Insights from South Africa

Warren Maroun

Accounting Forum, 2015, vol. 39, issue 1, 21-33

Abstract: •The research provides one of the first interpretive accounts of auditing in an African setting.•The association between audit quality and a duty to report irregularities to an independent regulatory body is explored.•The reporting duty contributes to the perceived auditor independence.•It also emphasises the importance of engagement leader participation and sound consultation and review policies.•Issuing more than a generic audit report can add significantly to the perceived value of the assurance function.In the aftermath of numerous corporate scandals and, more recently, the global financial crisis, the issue of audit quality is particularly relevant. Increasingly, numerous jurisdictions are relying on more exogenous forms of control over the audit profession in the interest of improving the quality of audit engagements and the reliability of audit reports. The purpose of this research is to examine the case for a form of mandatory whistle-blowing by South African auditors. Using an interpretive approach, this paper explores the association between a complementary reporting duty and notions of audit quality, recommending that a requirement for auditors to bring certain transgressions to the attention of an appropriate regulator can be a consideration for policy makers. At the same time, the research adds to the existing corporate governance literature by providing one of the first interpretive accounts of audit quality and reporting in a non Anglo-Saxon setting.

Date: 2015
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DOI: 10.1016/j.accfor.2014.03.002

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