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Crunch time for bank audits? Questions of practice and the scope for dialogue


  • Margaret Woods
  • Christopher Humphrey
  • Kevin Dowd
  • Yu-Lin Liu


Purpose - The purpose of this paper is to review the way in which auditing issues have been raised and addressed during the credit crunch and developing global financial crisis. Design/methodology/approach - Analysis is based on a review of the academic auditing literature, regulatory and audit reports, together with papers from the financial press. Findings - After highlighting the relative lack of media attention devoted to the external auditing function in the light of major corporate collapses, the paper considers what, contrastingly, is an active and ongoing series of responses to the current crisis on the part of auditing firms and the profession more generally. Through such analysis the paper explores a number of implications of the credit crunch for both auditing practice and research. Research limitations/implications - The paper is constrained in part by the rapidly unfolding nature of events, with important policy developments arising almost on a daily basis. The paper draws primarily on events up to the beginning of October 2008. Practical implications - The paper has important messages for audit practice and research, including the technical capacities of external audits in the banking sector, the contributions of standard setting bodies and regulatory oversight, and the scope for enhanced dialogue between such parties and audit researchers. Originality/value - The paper serves both to focus and stimulate analysis of the credit crunch on the audit profession. It demonstrates the complexity of contemporary practice and highlights the importance, especially from an educational perspective, of developing understanding of banking audit practice and associated regulatory interactions – including the presented possibilities both for research and enhanced academic-practitioner dialogue.

Suggested Citation

  • Margaret Woods & Christopher Humphrey & Kevin Dowd & Yu-Lin Liu, 2009. "Crunch time for bank audits? Questions of practice and the scope for dialogue," Managerial Auditing Journal, Emerald Group Publishing, vol. 24(2), pages 114-134, January.
  • Handle: RePEc:eme:majpps:v:24:y:2009:i:2:p:114-134

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    References listed on IDEAS

    1. Christopher Humphrey, 2008. "Auditing research: a review across the disciplinary divide," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 21(2), pages 170-203, February.
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    Cited by:

    1. Yahel Ma’ayan & Abraham Carmeli, 2016. "Internal Audits as a Source of Ethical Behavior, Efficiency, and Effectiveness in Work Units," Journal of Business Ethics, Springer, vol. 137(2), pages 347-363, August.
    2. repec:eee:riibaf:v:45:y:2018:i:c:p:94-105 is not listed on IDEAS
    3. repec:ebl:ecbull:eb-16-00517 is not listed on IDEAS
    4. Carnegie, Garry D. & Napier, Christopher J., 2010. "Traditional accountants and business professionals: Portraying the accounting profession after Enron," Accounting, Organizations and Society, Elsevier, vol. 35(3), pages 360-376, April.
    5. Humphrey, Christopher & Loft, Anne & Woods, Margaret, 2009. "The global audit profession and the international financial architecture: Understanding regulatory relationships at a time of financial crisis," Accounting, Organizations and Society, Elsevier, vol. 34(6-7), pages 810-825, August.

    More about this item


    Auditors; Banks; Auditing; World economy; Recession;


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