IDEAS home Printed from https://ideas.repec.org/a/eee/bracre/v51y2019i5s0890838918300489.html
   My bibliography  Save this article

The role of auditing in the fight against corruption

Author

Listed:
  • Jeppesen, Kim K.

Abstract

The purpose of this paper is to analyze how various types of auditing may contribute to fight corruption. While previous literature has primarily addressed auditing's ability to prevent corruption, this paper systematically explores auditing's potential to detect corruption. It argues that financial auditing has excluded corruption from the definition of fraud and instead classified it as ‘non-compliance with laws and regulations’. The main arguments for this exclusion is that corruption leaves no material errors in financial statements and no evidence for the auditor to follow. The paper refutes this, arguing that commercial and political corruption creates misstatements in the financial statements of the corruption giver's organization as well as the corruption receiver's organization. Thus, if auditing is to gain a more prominent role in the fight against corruption, auditing standards must include corruption in the definition of fraud, private and public sector auditors need to cooperate and exchange information, auditing techniques to detect corruption should be employed, and the auditing profession must embrace effective preventive measures such as anti-corruption certifications.

Suggested Citation

  • Jeppesen, Kim K., 2019. "The role of auditing in the fight against corruption," The British Accounting Review, Elsevier, vol. 51(5).
    • Handle: RePEc:eee:bracre:v:51:y:2019:i:5:s0890838918300489
    DOI: 10.1016/j.bar.2018.06.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0890838918300489
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.bar.2018.06.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dean Neu & Jeff Everett & Abu Shiraz Rahaman & Daniel Martinez, 2013. "Accounting and networks of corruption," Post-Print hal-00980294, HAL.
    2. Everett, Jeff & Neu, Dean & Rahaman, Abu Shiraz, 2007. "Accounting and the global fight against corruption," Accounting, Organizations and Society, Elsevier, vol. 32(6), pages 513-542, August.
    3. Mennicken, Andrea, 2010. "From inspection to auditing: audit and markets as linked ecologies," LSE Research Online Documents on Economics 27054, London School of Economics and Political Science, LSE Library.
    4. Roberts, John, 2015. "The ‘subject’ of corruption," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 28(C), pages 82-88.
    5. Claudio Ferraz & Frederico Finan, 2011. "Electoral Accountability and Corruption: Evidence from the Audits of Local Governments," American Economic Review, American Economic Association, vol. 101(4), pages 1274-1311, June.
    6. Sikka, Prem & Lehman, Glen, 2015. "The supply-side of corruption and limits to preventing corruption within government procurement and constructing ethical subjects," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 28(C), pages 62-70.
    7. Samer Khalil & Walid Saffar & Samir Trabelsi, 2015. "Disclosure Standards, Auditing Infrastructure, and Bribery Mitigation," Journal of Business Ethics, Springer, vol. 132(2), pages 379-399, December.
    8. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Staff Papers, Palgrave Macmillan, vol. 45(4), pages 559-594, December.
    9. Robert Klitgaard, 2006. "Introduction: Subverting Corruption," Global Crime, Taylor & Francis Journals, vol. 7(3-4), pages 299-307, August.
    10. Mennicken, Andrea, 2010. "From inspection to auditing: Audit and markets as linked ecologies," Accounting, Organizations and Society, Elsevier, vol. 35(3), pages 334-359, April.
    11. Neu, Dean & Everett, Jeff & Rahaman, Abu Shiraz & Martinez, Daniel, 2013. "Accounting and networks of corruption," Accounting, Organizations and Society, Elsevier, vol. 38(6), pages 505-524.
    12. Owolabi M. Bakre, 2007. "The unethical practices of accountants and auditors and the compromising stance of professional bodies in the corporate world: Evidence from corporate Nigeria," Accounting Forum, Taylor & Francis Journals, vol. 31(3), pages 277-303, September.
    13. Julie Battilana & Bernard Leca & Eva Boxenbaum, 2009. "How actors change institutions : Towards a theory of institutional entrepreneurship," Post-Print hal-00576509, HAL.
    14. Mr. Vito Tanzi, 1998. "Corruption Around the World: Causes, Consequences, Scope, and Cures," IMF Working Papers 1998/063, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Blane D. Lewis & Adrianus Hendrawan, 2020. "The impact of public sector accounting reform on corruption: Causal evidence from subnational Indonesia," Public Administration & Development, Blackwell Publishing, vol. 40(5), pages 245-254, December.
    2. Zeena Mardawi & Guillermina Tormo‐Carbó & Elies Seguí‐Mas & Saed Al‐Koni, 2023. "Does corruption rule the auditor's soul? Examining the auditors' attitude toward accepting corruption behaviors," Economics and Politics, Wiley Blackwell, vol. 35(3), pages 1070-1098, November.
    3. Pasquale Ruggiero & Riccardo Mussari, 2024. "The definition of corporate corruption prevention during the last decade: Bibliometrics and content data for the future research agenda," Business Strategy and the Environment, Wiley Blackwell, vol. 33(1), pages 43-54, January.
    4. Valentin-Marian Antohi & Monica Laura Zlati & Romeo Victor Ionescu & Mihaela Neculita & Raluca Rusu & Aurelian Constantin, 2020. "Attracting European Funds in the Romanian Economy and Leverage Points for Securing their Sustainable Management: A Critical Auditing Analysis," Sustainability, MDPI, vol. 12(13), pages 1-27, July.
    5. Demirović Lejla & Isaković-Kaplan Ševala & Krivić Džana, 2024. "Internal Audit in the function of preventing corruptive activities in the public sector of the Federation of Bosnia and Herzegovina," Journal of Forensic Accounting Profession, Sciendo, vol. 4(1), pages 15-32.
    6. Andrea Cardoni & Evgeniia Kiseleva & Francesco De Luca, 2020. "Continuous auditing and data mining for strategic risk control and anticorruption: Creating “fair” value in the digital age," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3072-3085, December.
    7. Cristina-Petrina Drăgușin (Trincu-Drăgușin) & Ileana Cosmina Pitulice & Aurelia Ștefănescu, 2021. "Harmonisation and Emergence Concerning the Performance Audit of the EU Member States’ Public Sector. Romania’s Case," Sustainability, MDPI, vol. 13(7), pages 1-18, March.
    8. Sargiacomo, Massimo & Everett, Jeff & Ianni, Luca & D'Andreamatteo, Antonio, 2024. "Auditing for fraud and corruption: A public-interest-based definition and analysis," The British Accounting Review, Elsevier, vol. 56(2).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abdul-Baki, Zayyad & Uthman, Ahmad B. & Kasum, Abubakar S., 2021. "The role of accounting and accountants in the oil subsidy corruption scandal in Nigeria," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 78(C).
    2. Lino, André Feliciano & Azevedo, Ricardo Rocha de & Aquino, André Carlos Busanelli de & Steccolini, Ileana, 2022. "Fighting or supporting corruption? The role of public sector audit organizations in Brazil," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 83(C).
    3. Lassou, Philippe J.C. & Hopper, Trevor & Ntim, Collins, 2021. "How the colonial legacy frames state audit institutions in Benin that fail to curb corruption," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 78(C).
    4. Changwony, Frederick Kibon & Paterson, Audrey S., 2019. "Accounting practice, fiscal decentralization and corruption," The British Accounting Review, Elsevier, vol. 51(5).
    5. Pianezzi, Daniela & Ashraf, Muhammad Junaid, 2022. "Accounting for ignorance: An investigation into corruption, immigration and the state," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 86(C).
    6. Kshitiz Shrestha & Jorge Martinez‐Vazquez & Charles Hankla, 2023. "Political decentralization and corruption: Exploring the conditional role of parties," Economics and Politics, Wiley Blackwell, vol. 35(1), pages 411-439, March.
    7. Ferry, Laurence & Zakaria, Zamzulaila & Zakaria, Zarina & Slack, Richard, 2018. "Framing public governance in Malaysia: Rhetorical appeals through accrual accounting," Accounting forum, Elsevier, vol. 42(2), pages 170-183.
    8. Giommoni, Tommaso & Morelli, Massimo & Nicolò, Antonio, 2020. "Corruption and Extremism," CEPR Discussion Papers 14634, C.E.P.R. Discussion Papers.
      • Attila Gaspar & Tommaso Giommoni & Massimo Morelli & Antonio Nicolò, 2021. "Corruption and Extremism," BAFFI CAREFIN Working Papers 21163, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    9. Eugen Dimant & Guglielmo Tosato, 2018. "Causes And Effects Of Corruption: What Has Past Decade'S Empirical Research Taught Us? A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 335-356, April.
    10. Günther G. Schulze & Bambang Suharnoko Sjahrir & Nikita Zakharov, 2016. "Corruption in Russia," Journal of Law and Economics, University of Chicago Press, vol. 59(1), pages 135-171.
    11. Lindsey Carson & Mariana Mota Prado, 2014. "Mapping Corruption and its Institutional Determinants in Brazil," Global Development Institute Working Paper Series iriba_wp08, GDI, The University of Manchester.
    12. Alexander Stoecker, 2021. "Partisan Alignment and Political Corruption: Evidence from a New Democracy," Volkswirtschaftliche Diskussionsbeiträge 192-21, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    13. Stoecker, Alexander, 2022. "Partisan alignment and political corruption: Evidence from a new democracy," World Development, Elsevier, vol. 152(C).
    14. El-Helaly, Moataz & Ntim, Collins G. & Al-Gazzar, Manar, 2020. "Diffusion theory, national corruption and IFRS adoption around the world," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 38(C).
    15. Antonis M. Koumpias & Jorge Martinez-Vazquez & Eduardo Sanz-Arcega, 2015. "Housing Bubbles and Zoning Corruption: Evidence from Greece and Spain," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1505, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    16. Sargiacomo, Massimo & Ianni, Luca & D’Andreamatteo, Antonio & Servalli, Stefania, 2015. "Accounting and the fight against corruption in Italian government procurement: A longitudinal critical analysis (1992–2014)," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 28(C), pages 89-96.
    17. Krisztina Kis-Katos & Günther G. Schulze, 2013. "Corruption in Southeast Asia: a survey of recent research," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 27(1), pages 79-109, May.
    18. Morelli, Massimo & Giommoni, Tommaso & Nicolò, Antonio, 2020. "Corruption and Extremism," CEPR Discussion Papers 14634, C.E.P.R. Discussion Papers.
      • Attila Gaspar & Tommaso Giommoni & Massimo Morelli & Antonio Nicolò, 2021. "Corruption and Extremism," BAFFI CAREFIN Working Papers 21163, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    19. Neu, Dean & Everett, Jeff & Rahaman, Abu Shiraz & Martinez, Daniel, 2013. "Accounting and networks of corruption," Accounting, Organizations and Society, Elsevier, vol. 38(6), pages 505-524.
    20. Mulcahy, Mark & Beck, Matthias & Carr, Michelle & Hourigan, Niamh, 2019. "Novel approaches to the regulatory control of financial services providers: The importance of cultural context," The British Accounting Review, Elsevier, vol. 51(5).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:bracre:v:51:y:2019:i:5:s0890838918300489. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/the-british-accounting-review .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.