The role of auditors in the financial crisis, part three

The role of auditors in the financial crisis, part three

The role of auditors in the financial crisis of the third part. In this part, we continue the contents of the previous parts.

Continuing the independence of auditors in the financial crisis

Currently, it is necessary for auditors to learn methods and practices that are appropriate to the changes in the capitalist system in order to compensate for the recent scandals.

In recent crises, auditing institutions received a lot of fees due to the importance of their opinion for government institutions and organizations (Auditing Practices Board, 2004).

According to the existing issues, two basic and important issues are raised.

The first and oldest issue raised about other services of audit institutions to banks and companies and its effect on self-sufficiency and independence of audit work.

One of the notoriety of auditing institutions is providing financial advice to their clients.

However, in a research conducted by the audit functions board, it was found that the differences in profit were not affected by non-audit services, which according to some researchers, the audit functions board was influenced by audit institutions.

In such a situation, where a major part of monitoring and control is done by groups that are self-justifiers and advisors of economic plans, it is against the regulatory laws.

And in this case, there is a need to amend the audit rules.

The second issue is related to the general audit model and auditors’ fees.

Audit institutions are capitalist companies that depend on companies to earn money.

The effect of the auditors’ opinion on their fees affects the auditors’ independence and has the ability to silence the auditors regarding the fraudulent practices of the companies (Auditing Practices Board, 2007).

The proposed model regarding auditing is the privatization model of auditing, in which one group of capitalists (auditors) supervise another group of capitalists (company managers).

One of the disadvantages of this model is creating an independent legal majority as auditors in the society (Heseltin, 1987).

The recent financial crisis created an opportunity to pay attention to the chains of organizational behavior for auditing. In this model, there is no need for accounting companies to be directly involved in auditing, but for banks and companies to be audited by internal legal auditors.

In this model, internal auditors’ knowledge about the company’s or bank’s activities increases.

And the audit reports are a clear witness of the audit, although to some extent the processes and values of the organization depend on the audit product.

Such processes enhance employee management, economic incentives, and insight for customers, people, and auditors.

In recent years, audit plans and methods have been criticized to a large extent.

And this has created a suitable opportunity for further research through the review and investigation of litigation cases against auditors.

Now the capitalist system has raised many questions about the basis of auditing knowledge.

They believe that auditors have been using fixed and traditional methods for more than a century, in which visible things are calculated, measured, and their correctness is tested through documents such as invoices, documents, etc. to be

If now, complex documents related to future events have affected this method (Sikka, 2008c).

Conclusion and Recommendations

The recent financial crisis has raised many questions about the role and value of independent auditing.

According to the issues raised, now the opinion of auditors is not accepted in the society and there are suspicions such as that auditors do not have enough authority to investigate financial events or that auditors do not have enough independence.

Now the time has come for the auditing standards to be advanced with the progress of the capitalist system.

and be able to respond to existing needs so that they are not pressured in financial crises that may occur in the future.