Is The Scope of Auditor Statements in Need of Expansion

Level: Undergraduate | Grade: 2:1 | Approx. Word Count: 1,050

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Overview

Following a brief overview of the auditor role, this essay examines the arguments presented by both parties and presents the researcher’s conclusion as to their validity.

Despite the introduction of regulations and codes designed to improve the effectiveness of the auditor role in corporate financial reporting, since the beginning of the 2000s business stakeholders, predominantly led by international shareholders, have continued to raise questions regarding the narrow focus of the statements presented by auditors in corporate financial reports (Copnell 2006). These stakeholders have suggested that for the purpose of transparency and reliability, the content of auditor statements need to be expanded. This has led to a rigorous debated between internal business management stakeholders, who argue that further expansion of current standards would increase costs (Tan 2004), and the external stakeholder groups who suggest that expanding these statements will improve the transparency of the financial reports and, more importantly, their ability to rely on auditor independence (Copnell 2006).
Model: Undergraduate