Towards Advancing Audit Quality in the UK: A Forensic Accounting Skillsets agenda

The persistent failings of financial statement audits, highlighted by numerous high-profile fraud scandals, have raised significant concerns about the credibility and relevance of the auditing profession. This thesis investigates the integration of forensic accounting skillsets into UK statutory audits and auditors' education to bridge the competency gap in fraud detection. Drawing on Comfort Theory and the Agency Diamond model, the study explores the perceptions of key stakeholders, including forensic accountants, external auditors, educators, and professional body specialists. This study adopts a neo-empiricist theoretical stance, contending that knowledge can be objectively generated through systematic empirical evidence and rigorous interpretive approaches to understand the complexity of the participants’ perceptions and develop theory. Through semi-structured interviews and a general inductive analytical approach, the research identifies the four pillars of forensic accounting skillsets: questioning skills, conscientious skills, intellectual reasoning skills, and psychological observation skills. The study highlights the interrelatedness of these skillset pillars and identifies that a mindset to detect fraud is expedient to how auditors can employ the forensic accounting skillsets to improve audit quality. The findings suggest that incorporating these skillsets, along with a fraud detection mindset, into auditors' education and continuous professional development can significantly improve their capability to detect and report financial misrepresentations, thereby enhancing the overall quality of audits. The study proposes a comprehensive educational and training programme that incorporates the forensic accounting mindset-skillsets relationship (MSR) concept, ensuring auditors are equipped to meet the evolving challenges of financial statement audits. This research contributes to the ongoing discourse on audit quality and offers practical solutions to enhance the auditing profession's role in safeguarding financial integrity.