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What never made any sense to me was the incentives. Is the company supposed to hire people to write a public report saying the company committed fraud? It doesn
by lordnacho 4y ago
What never made any sense to me was the incentives. Is the company supposed to hire people to write a public report saying the company committed fraud? It doesn't really seem like it makes sense for anyone. If anything, you'd just do some minimal performative work to say you had a good look in the company, and then you pick up more work next year. If you write a critical report, how many companies will want to hire you? I'll pick the easy going auditor who doesn't give me a hard time, thanks.
Contrast that with say an HMRC tax audit. They're not there to be your friend and it actually makes sense for them to investigate certain firms.
It would be interesting to read a history of the industry to see how we ended up here.
- jsmith99 4y agoThe auditors are appointed by the audit committee which consists of board members who are non executive directors i.e. they are not involved in the day to day running of the company and so theoretically should be independent and interested in uncovering any wrongdoing by management.
- Jolter 4y agoExactly — the auditor is appointed to represent the interests of the shareholders, not the executives. At least, that’s the way it is supposed to work.