Globalization of Auditing

Routledge Companion to Auditing, edited by David Hay, W. Robert Knechel and Marleen Willekens, 2013

Posted: 17 Apr 2014

Date Written: July 19, 2013

Abstract

To audit global clients, auditing has been transformed into a global profession. This has been driven by client demand for provision of co-ordinated services wherever they may be required. At the same time, additional regulation in the form of international auditing standards, requirements to report on the governance of audit firms and extraterritorial laws requiring audit firm inspections have been implemented demonstrating the interconnectedness of global, regional and national influences on the audit profession. The structure of the global audit market has changed significantly as a result of mergers and by collapse, with a reduction in the number of largest firms serving global clients from the Big 8 in the late 1980s to the Big 4 by the early 21st century. These large audit firms are structured as networks as this enables these national partnerships to expand under a common brand name to deliver services across the globe whilst preserving legal separation for national offices in the presence of significant litigation risk for audit professionals. Key concerns of regulators include audit quality across countries (especially in countries where the quality of legal institutions is weak), across audit firm networks as well as auditing of multinationals and cross-border transactions. There are many opportunities for research examining these issues using varying units of analysis, and employing a variety of methodological approaches.

Keywords: audit, audit firms, globalization, networks

JEL Classification: M49

Suggested Citation

Carson, Elizabeth, Globalization of Auditing (July 19, 2013). Routledge Companion to Auditing, edited by David Hay, W. Robert Knechel and Marleen Willekens, 2013. Available at SSRN: https://ssrn.com/abstract=2426043

Elizabeth Carson (Contact Author)

University of New South Wales ( email )

Sydney, NSW 2052
Australia
+612 9385 5822 (Phone)
+612 9385 5925 (Fax)

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