Accounting Scandals: Beyond Corporate Governance

13 Pages Posted: 12 Jan 2018 Last revised: 1 Mar 2018

See all articles by Ifedapo Francis Awolowo

Ifedapo Francis Awolowo

Sheffield Hallam University, Sheffield Business School

Nigel Garrow

Sheffield Hallam University - Sheffield Business School

Murray C. Clark

Sheffield Hallam University

Dora Chan

Sheffield Hallam University - Sheffield Business School

Date Written: January 12, 2018

Abstract

Accounting scandals are becoming perpetual in nature. They range from the ancient Mesopotamia, to the South Sea Bubble of 1720, to the famous Enron of 2001, down to Parmalat, Tesco and Toshiba of today. The series of accounting scandals that have occurred in the last two decades calls for a greater concern by the accounting profession. The accounting scandals that have occurred in this 21st century alone have shown that there is a need to look beyond corporate governance in the fight against financial deception. In this paper we argue that even in the face of the Sarbanes Oxley Act of 2002 and other regulations around the world that are targeted towards effective corporate governance, accounting scandals have never ceased to occur. Most of the legislation that has been passed in recent times was targeted at corporate governance, forgetting the crucial role that audit play within the agency relationship. And whenever there is any revelation of fraudulent financial reporting, investors don’t ask who are the directors, but the first question they ask is who are the auditors? Hence, there is a need to improve audit quality by approaching it from a forensic accounting perspective in order, to reduce the incidence of financial statement frauds in this era of information revolution. Thus, restoring investors’ confidence back in the financial reporting process and corporate governance. In this paper, we propose a forensic accounting paradigm as a viable option for reducing accounting scandals, since this will compliment corporate governance systems.

Keywords: Corporate Governance, Accounting, Auditng, Forensic accounting, Accounting sacndals, Financial Statement Fraud, Agency Theory

JEL Classification: M14, M41, M42, G32

Suggested Citation

Awolowo, Ifedapo Francis and Garrow, Nigel and Clark, Murray C. and Chan, Dora, Accounting Scandals: Beyond Corporate Governance (January 12, 2018). 9th Conference on Financial Markets and Corporate Governance (FMCG) 2018, Available at SSRN: https://ssrn.com/abstract=3101057 or http://dx.doi.org/10.2139/ssrn.3101057

Ifedapo Francis Awolowo (Contact Author)

Sheffield Hallam University, Sheffield Business School ( email )

City Campus
Howard Street
Sheffield, S1 1WB
United Kingdom
01142255257 (Phone)

Nigel Garrow

Sheffield Hallam University - Sheffield Business School ( email )

City Campus
Howard Street
Sheffield, S1 1WB
United Kingdom

Murray C. Clark

Sheffield Hallam University ( email )

School of Business & Finance
Sheffield
United Kingdom

Dora Chan

Sheffield Hallam University - Sheffield Business School ( email )

City Campus
Howard Street
Sheffield, S1 1WB
United Kingdom

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