The value of audit and the economic history of market
by Boon Seng Tan
International Journal of Economics and Accounting (IJEA), Vol. 6, No. 4, 2015

Abstract: We argue that the value of audit consists of three components whose relative importance shifted over time due to the changing economics of business. The three components are: 1) detecting fraud; 2) as an element of corporate governance; 3) facilitating the smooth functioning of capital market. Fraud detection is important in the early history of audit, but the rise of risk-based auditing and increased complexity of business diminish that role. The development of capital markets increases the importance of audit's role in enhancing corporate governance and its contribution to the efficiency of capital market. However, historical legacy give rise to an expectation gap - between the public and the professional - of the value of audit. Professional accounting body and audit firms should educate the public of the value of audit. This paper contributes to this education.

Online publication date: Sat, 06-Feb-2016

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economics and Accounting (IJEA):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com