HOW DO AUDITORS RESPOND TO WHISTLEBLOWING ALLEGATIONS TOWARDS THEIR CLIENTS?

On 21 December, an article in Forbes says that a research study first published in May examines how financial statement auditors respond to allegations of financial misconduct towards the companies they audit.  For the study, titled “Whistleblowing Allegations, Audit Fees, and Internal Control Deficiencies”, researchers from the University of Melbourne performed interviews of audit practitioners and examined 770 external whistleblowing allegations of financial misconduct to determine if and how auditors respond.  Amongst its findings were that companies subject to whistleblowing allegations have significantly higher audit fees in the year the external report is filed, regardless of the substance of the allegations.  It is also said that a year prior to the external whistleblowing allegation, audit fees are higher, suggesting that auditors are likely aware of the issue when it was at an internal whistleblowing stage and react by increasing their effort.

https://www.forbes.com/sites/josephbrazel/2020/12/21/how-do-auditors-respond-to-whistleblowing-allegations-towards-their-clients

https://onlinelibrary.wiley.com/doi/10.1111/1911-3846.12619

 

 

I had omitted the following link (as it did not seem to generate much interest!), but it seemed time to add it again and say that, if you would like to make a (polite) gesture and help me with my removal and computer costs, I have a page at https://www.buymeacoffee.com/KoIvM842y

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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