Auditing with Accountability: how to create an accountable future for accountancy

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This morning four of my recent co-authors published a joint paper on the future of auditing in the UK, and much more widely. Funded by Luminate, the work was undertaken under the umbrella of the University of Sheffield's Centre for Research into Accounting and Finance in Context (CRAFiC). Copenhagen Business School were the other project partner. As they noted:

Auditing with Accountability: shrinking the opportunity spaces for audit failure

In recent years a number of high-profile company failures have raised fundamental questions about the willingness and/or ability of auditors to exercise the professional scepticism necessary for the production of robust audits.

This report, co-written by Adam Leaver at the University of Sheffield and Leonard Seabrooke, Saila Stausholm and Duncan Wigan at Copenhagen Business School, examines the causes of those failures and makes a series of recommendations on how to resolve them.

The report argues that audit failure takes place within a particular configuration of economic, cultural and regulatory arrangements which create the 'opportunity spaces' for poor practice. Shrinking those opportunity spaces therefore requires a multi-dimensional response, including the structural separation of audit and non-audit functions, a more robust system of fines and the integration of a civil society voice into the reform process to prevent regulatory capture.

Adam Leaver of the University of Sheffield, with whom I am currently working and who is a director of the Corporate Accountability Network has tweeted about the report saying:

I recommend the report.

In the interests of full disclosure, I am one of the interviewees who views are recorded in it.