Auditor independence and the nexus with corporate governance-quo vadis?

van Esch, Sandra D. and Kelly, Christopher 2002, Auditor independence and the nexus with corporate governance-quo vadis?, in SAAA 2002 : Southern African Accounting Association Biennial International Conference : Port Elizabeth, South Africa, 26-28 June 2002, SAAA, [South Africa], pp. 272-297.

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Title Auditor independence and the nexus with corporate governance-quo vadis?
Author(s) van Esch, Sandra D.
Kelly, Christopher
Conference name Southern African Accounting Association International Conference (2002 : Port Elizabeth, South Africa)
Conference location Port Elizabeth, South Africa
Conference dates 26-28 June 2002
Title of proceedings SAAA 2002 : Southern African Accounting Association Biennial International Conference : Port Elizabeth, South Africa, 26-28 June 2002
Editor(s) Stainbank,Lesley
Publication date 2002
Conference series Southern African Accounting Association Conference
Start page 272
End page 297
Publisher SAAA
Place of publication [South Africa]
Keyword(s) auditor independence
code of ethics
corporate governance
public oversight bodies
regulation of the accountancy profession and corporate entities
Summary "Where were the auditors?" Yet again, the independence of the auditor has come under close, critical scrutiny with ongoing collapses of large listed companies, which have global implications for the proper functioning of investment markets. The most recent collapse being that of ENRON in the United States of America, (USA).

"Who are the auditors?" The nexus of auditor independence with corporate governance is examined drawing on Foucault's notion of the relationships between power I knowledge and ethics in the construction of ethical identity. In the face of declining public confidence and demands for more stringent regulation, the tensions between greater self-regulation of auditors by the accounting profession and moves by governments to impose more stringent legislation I regulation, including the creation of public oversight bodies is apparent. This paper presents a comparative analysis of recent developments internationally, with particular reference to South Africa and Australia, intended to more rigorously enforce auditor independence and improve corporate governance. Five key areas identified by various Commissions and regulatory bodies that are regarded as posing significant threats to auditor independence are highlighted. Recommendations for changes to independence requirements in professional codes of ethics and corporate legislation, intended to safeguard auditor independence and to enhance investor protection, are critically examined. It is argued that the "new" independence recommendations while providing more detailed guidance for dealing with the independence threats fail to introduce any new concepts and may be found as ineffective as the plethora of earlier regulations. (This paper represents work in progress, which is intended to spark debate, and accordingly, the authors invite comment from readers to develop further aspects of research into this critical area).
Language eng
Field of Research 150102 Auditing and Accountability
Socio Economic Objective 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
HERDC Research category E1 Full written paper - refereed
ERA Research output type E Conference publication
Copyright notice ©2002, SAAA
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Document type: Conference Paper
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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