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Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited
Special issue on The future of the external audit function
External audit faces contemporary challenges both as regards the subject matter audited and the ways auditors carry out their activities. Corporate financial reporting is arguably juxtaposed with corporate disclosures in a range of areas such as corporate and social responsibility, corporate governance and risk. These developments prompt questions about the nature of audit assurance required by stakeholders, while at the same time developments in audit methodologies have arguably created a capacity for auditor engagement with dimensions of the corporation such as enterprise risk management. There may be scope for synergy between the contemporary external audit and risk management agendas.
Such posited developments may suggest a need to re-examine the present auditor liability framework. At the same time, there is questioning of the value of much that passes for audit activity. While the post-Enron world continues to reiterate independence considerations, there is recognition that these may conflict with audit competence, resonating with past proposals to have internal audit execute most of what presently comes under the external audit umbrella. Enhanced independence may come at the cost of an emphasis on the superficial and a lack of auditor- client dialogue. In any event, both present audit market structures and the societal loosening of traditional moral frameworks may make the rhetoric of an independent audit profession based on practitioner integrity implausible.
There are also questions about the channels of audit activity and the form of audit reporting. Is there still a role for the compulsory statutory audit given both the diversity of shareholder and stakeholder needs and the existence of alternative sources and channels of assurance? Is the present form of audit reporting, much of which is framed in terms of disclamation, satisfactory? Is sufficient entity-specific information provided? Are audit reports structured around the true and fair view still convincing, given the increasingly complex nature of financial reporting and claims by auditors that intricate corporate transactions may be beyond their competence to disentangle?
The issues raised above are illustrative of contemporary challenges rather than an exhaustive list. The purpose of this special issue is to facilitate meaningful debate on the future of external audit. The aim of the guest editors is that this special issue will help to engender dialogue between academics and practitioners (from whom contributions are also very welcome). Contributors are invited to think as widely as possible. Papers are invited on, but are not restricted to, themes such as:
audit assurance on new forms of corporate reporting;
external audit and the risk management agenda;
auditor liability and the need to widen the scope of audit assurance;
the respective roles of external and internal audit;
reappraisal of the need for a compulsory statutory audit and of new channels of audit assurance;
the form and content of audit reporting; and
the potential for voluntary components of the audit reporting package.
Papers should be sent electronically by e-mail (in a Word format file) to the guest editors by the submission deadline of 31 December 2007. Authors are asked to follow the Managerial Auditing Journal standard formatting requirements. All papers will be reviewed in accordance with normal MAJ processes.
The guest editors of this MAJ special issue are Ian Fraser (Professor of Accounting, Department of Accounting and Finance, University of Stirling, e-mail: firstname.lastname@example.org) and Chris Pong (Senior Lecturer in Accounting, Management School and Economics, University of Edinburgh, e-mail: Chris.Pong@ed.ac.uk). Authors wishing to discuss the general suitability of their paper prior to submission are invited to contact the guest editors by e-mail.