Auditors' Evolving Responsibilities and the Rising Costs of Professional Negligence: A Comprehensive Examination

Ifedapo Francis Awolowo; Nigel Garrow; Dora Chan; Anthony Oni; Adenike Abidoye

doi:10.2478/jfap-2024-0007

Ifedapo Francis Awolowo Sheffield Hallam University, UK
Nigel Garrow Sheffield Hallam University
Dora Chan Sheffield Hallam University, UK
Anthony Oni Sheffield Hallam University, UK
Adenike Abidoye Sheffield Hallam University, UK

DOI: https://doi.org/10.2478/jfap-2024-0007

Keywords: Professional Negligence, Auditors Responsibilities, Audit Quality, Financial Statement Fraud, Forensic Accounting

Abstract

In recent times, professional negligence has taken centre stage in the news. The inability of auditors to uncover fraud in their clients’ financial records has become a topic of intense debate among industry professionals and regulators, with no clear consensus reached thus far. This paper employs a qualitative research approach to delve into the consequences of professional negligence and why auditors will continue to face the consequences of their failure to detect fraud in their clients’ financial records. Our research findings indicate that auditors will continue to bear the brunt of professional negligence until there is a fundamental shift in their mandate, prompting them to assume a more proactive role in detecting fraud within financial statements. The repercussions of professional negligence extend beyond financial losses, encompassing intangible costs that severely tarnish the reputation of the auditing profession.

(Previously published on Sciendo: https://sciendo.com/article/10.2478/jfap-2024-0007, pod licencom CC BY-NC-ND 4.0)