The Role of Auditing in Corporate Governance in Australia and New Zealand: A Research Synthesis

69 Pages Posted: 13 Sep 2016 Last revised: 12 Apr 2017

See all articles by David Hay

David Hay

University of Auckland - Business School

Jenny Stewart

Griffith University - Griffith Business School

Nives Botica Redmayne

Massey University

Date Written: September 13, 2016

Abstract

Corporate governance is of growing importance in Australia, New Zealand and all over the world. Corporate governance interacts with auditing and it is useful to understand how corporate governance and auditing affect companies. However, the interaction is not straight forward. To some extent, good auditing will lead to recommendations that will lead to improved governance; while on the other hand, good governance will lead to directors setting high standards including demanding a high standard of auditing. A related issue is whether better governance is a substitute for auditing or a complement. Previous studies of that issue have had mixed results. This review article provides a synthesis of Australian and New Zealand research about corporate governance and auditing that takes stock of what has been found and examines issues that can be explored using multiple studies. We conclude that despite extensive research, there is still considerable uncertainty about the effects of corporate governance mechanisms on auditing and the effects of auditing on corporate governance. The results are intended to be helpful in providing advice about policy in Australia and New Zealand, and in determining directions for new research.

Keywords: auditing, corporate governance, external auditing, internal auditing, Australia, New Zealand

JEL Classification: L13, L84, M40, M42

Suggested Citation

Hay, David and Stewart, Jenny and Botica Redmayne, Nives, The Role of Auditing in Corporate Governance in Australia and New Zealand: A Research Synthesis (September 13, 2016). 8th Conference on Financial Markets and Corporate Governance (FMCG) 2017. Available at SSRN: https://ssrn.com/abstract=2838066 or http://dx.doi.org/10.2139/ssrn.2838066

David Hay (Contact Author)

University of Auckland - Business School ( email )

12 Grafton Rd
Auckland, 1010
New Zealand

Jenny Stewart

Griffith University - Griffith Business School ( email )

Brisbane, Queensland 4111
Australia

Nives Botica Redmayne

Massey University ( email )

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