Crunch Time for Bank Audits? Questions of Practice and the Scope for Dialogue

32 Pages Posted: 11 Feb 2009 Last revised: 7 Jul 2009

See all articles by Margaret Woods

Margaret Woods

Aston Business School

Christopher Humphrey

University of Manchester - Division of Accounting and Finance

Kevin Dowd

Nottingham University Business School (NUBS)

Date Written: February 10, 2009

Abstract

This paper reviews the way in which auditing issues have been raised and addressed during the credit crunch and developing global financial crisis. Analysis is based on a review of the academic auditing literature, regulatory and audit reports, together with articles from the financial press.

The paper serves both to focus and stimulate analysis of the credit crunch on the audit profession. It demonstrates the complexity of contemporary practice and highlights the importance of developing understanding of banking audit practice and associated regulatory interactions - including the possibilities both for research and enhanced academic-practitioner dialogue.

After highlighting the relative lack of media attention devoted to the external auditing function in the light of major corporate collapses, we consider what, contrastingly, is an active and ongoing series of responses to the current crisis on the part of auditing firms and the profession more generally. Through such analysis the paper explores a number of implications of the credit crunch for both auditing practice and research, including the technical capacities of external audits in the banking sector, the contributions of standard setting bodies and regulatory oversight, and the scope for enhanced dialogue between such parties and audit researchers.

Keywords: Credit crunch, auditors, fair value, bank auditing, auditing expectations, audit research

JEL Classification: G20, G21, G28, G30, G38, M41, M44, M49

Suggested Citation

Woods, Margaret and Humphrey, Christopher and Dowd, Kevin, Crunch Time for Bank Audits? Questions of Practice and the Scope for Dialogue (February 10, 2009). Available at SSRN: https://ssrn.com/abstract=1340491 or http://dx.doi.org/10.2139/ssrn.1340491

Margaret Woods (Contact Author)

Aston Business School ( email )

Aston Business School
Aston Triangle
Birmingham, B4 7ET
United Kingdom

Christopher Humphrey

University of Manchester - Division of Accounting and Finance ( email )

Crawford House
Oxford Road
Manchester M13 9PL
United Kingdom

Kevin Dowd

Nottingham University Business School (NUBS) ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

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