Oversight and Inspection of Auditing
Routledge Companion to Auditing, edited by David Hay, W. Robert Knechel and Marleen Willekens, Forthcoming
Posted: 13 Apr 2014
Date Written: April 11, 2014
One of the major changes in audit regulation of the past decade relates to the system of audit oversight. In response to high-profile corporate financial reporting scandals, the US set the tone by creating the Public Company Accounting Oversight Board (PCAOB) in 2002 and thereby putting an end to self-regulation of the auditing profession, which had been the dominant model for many decades. Subsequently, many other countries followed the US example of installing independent public oversight in varying forms and stages of development. The central aim of independent audit regulators is to enhance protection of investors and the public interest through audit oversight, enforcement and improvements in audit quality. Despite the potential merits of public oversight, it cannot be denied that corporate scandals continue to occur across the globe and that regulators continue to be under pressure especially in the aftermath of the financial crisis and the current economic downturn. Hence, the core mission of oversight bodies seems far from completed. In this chapter, we introduce public oversight by providing an overview of the development and current challenges, a summary of research findings and outstanding issues for future research.
Keywords: Public oversight, inspections, auditing profession
Suggested Citation: Suggested Citation