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.
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