Accounting scandals: beyond corporate governance

AWOLOWO, Ifedapo, GARROW, Nigel, CLARK, Murray and CHAN, Dora (2018). Accounting scandals: beyond corporate governance. Journal of Modern Accounting and Auditing, 14 (8), 399-407.

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Abstract

Accounting scandals are becoming perpetual in nature. They range from the ancient Mesopotamia, to the South Sea Bubble of 1720, to the famous Enron of 2001, down to Parmalat, Tesco, and Toshiba of today. The series of accounting scandals that have occurred in the last two decades calls for a greater concern by the accounting profession. The accounting scandals that have occurred in this 21st century alone have shown that there is a need to look beyond corporate governance in the fight against financial deception. In this paper, we argue that even in the face of the Sarbanes-Oxley Act (SOA) of 2002 and other regulations around the world that are targeted towards effective corporate governance, accounting scandals have never ceased to occur. Most of the legislations that have been passed in recent times were targeted at corporate governance, forgetting the crucial role that audit plays within the agency relationship. And whenever there is any revelation of fraudulent financial reporting, investors do not ask who are the directors, but the first question they ask is who are the auditors? Hence, there is a need to improve audit quality by approaching it from a forensic accounting perspective in order to reduce the incidence of financial statement frauds in this era of information revolution, thus restoring investors’ confidence back in the financial reporting process and corporate governance. In this paper, we propose a forensic accounting paradigm as a viable option for reducing accounting scandals, since this will compliment corporate governance systems.

Item Type:	Article
Uncontrolled Keywords:	1501 Accounting, Auditing And Accountability; 1502 Banking, Finance And Investment
Departments - Does NOT include content added after October 2018:	Sheffield Business School > Department of Finance, Accountancy and Business Systems
Identification Number:	https://doi.org/10.17265/1548-6583/2018.08.001
Page Range:	399-407
SWORD Depositor:	Symplectic Elements
Depositing User:	Symplectic Elements
Date Deposited:	05 Nov 2018 10:29
Last Modified:	18 Mar 2021 06:35
URI:	https://shura.shu.ac.uk/id/eprint/23162

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