Drivers of Audit Failures: A Comparative Discourse

Authors : Etim, E. Osim; Comfort Precious Goddymkpa; Nsima Johnson Umoffong

Volume/Issue : Volume 5 - 2020, Issue 7 - July

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DOI : 10.38124/IJISRT20JUL105

The aim of this study is to identify the most potent factors driving audit failures by theoreticallyexploring two most publicized corporate and external audit failures cases in Nigeria and globally (EnronAndersen and Cadbury Akintola Williams Deloitte). An exploratory case study approach was adopted to analyze the selected two cases and several other external audit failures in extent literature. Findings reveal that audit failure factors are the same in the cases analyzed and compared and include poor audit approach, negligence and incompetency from the auditors, lack of professional questioning attitude, connivance with clients, fee dependence on major clients, long tenured appointment, external auditors acting as internal auditors to client and rendition of Management Advisory Services (MAS), blatant disregard to accounting standards on auditing, among others. Based on these findings, the following recommendations were made: more stringent sanctions be molted to defaulters, regular review and update of accounting and auditing standards to take care contemporary developments, prohibition of external auditors from rendering multiple MAS, adherence to ethical principles, strengthening of corporate governance structure as well as improved oversight functions by regulatory authorities on the activities of corporate management and auditors.

Keywords : Audit failures, account manipulations, negligence, lack of competency, MAS


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31 - December - 2023

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