The corporate image of auditors in a developing audit market within the EU: the case of Spain

This paper examines the images of audit firms in Spain. Spain offers a valuable research context in that it is a relatively new audit market and one where the top company audits are not totally dominated by the large multinational audit firms, allowing for a comparison of the images of such firms against those associated with smaller, national audit firms. The findings of this survey are pertinent given the current level of debate internationally over the role, regulation and quality of auditing services and concerns over the potential impact of recent corporate scandals on auditor reputation. Our study shows that the images of audit firms in Spain have differed on a number of dimensions, mostly concerned with the pricing of audit services and the spread of audit clients. Significantly, no differences were obtained in relation to the perceived competence or ethical standing of the large multinational and Spanish, national audit firms. The study also shows the areas of the audit firm's corporate image where the actual image of the firm differs significantly from that desired by the management of their clients.

Beyond the audit expectations gap

In seeking to encourage a broader, European dimension to research on auditing and audit expectations, this paper examines the recent history of auditing and its regulation in Spain within the context of international developments in the accounting profession. The more expansive role being assigned to the audit function in Spain following the implementation of the Fourth and Eighth European Company Law Directives is generally viewed by Spanish writers as a progressive step, with largely positive effects. Such views stand in some contrast to the history of auditing in Britain, where the prevalence of an 'audit expectations gap' suggests a rather more problematic state of affairs. In exploring both the Spanish context and the nature of the audit expectations gap in Britain, however, the paper reveals a common underlying belief in the potential of auditing. Through this comparative analysis, and by drawing on recent audit research challenging certain long-held assumptions about auditing, a number of questions are asked of the current form and status of auditing and auditing expectations in Britain and Spain. In so doing, the paper raises issues that go beyond the current confines of the audit expectations gap debate, stressing, in particular, the need for greater consideration to be given, through less Anglo-centric analyses, to the varying nature and capabilities of European audit practice.