Reforms to the market for audit and assurance services in the period after the global financial crisis:Evidence from the UK

There was little effect by the Global Financial Crisis (GFC) on audit practices in Australia, as the country was largely sheltered from the GFC. The U.K. and Europe which had experienced significant reforms to audit were not sheltered from the GFC and regulators and law makers were pressured to take further action. The key UK and European audit reforms included the expanded auditors' report, disclosures on materiality thresholds, bans, caps and restrictions on non-audit services, viability statements released by directors, more powers for audit committees and mandatory firm rotation by auditors. The aim of this exploratory research study is to obtain the views of relevant stakeholders in relation to the benefits and costs of the recent UK audit reforms and the new EU Audit Directive (July 2016), and via a synthesis of these results and a review of the relevant Australian accounting literature, consider whether there is scope and benefits for Australia to now adopt similar reforms to audit and assurance services. The study finds that there are significant reforms to audit that have benefited the UK audit profession, and an open debate in Australia needs to be considered regarding the need for similar reforms perhaps before the next wave of accounting scandals and corporate collapses. The study suggests a need for a more proactive approach to audit reform and this lends support to recent findings from Australian accounting research studies

The consumer scam: an agency-theoretic approach

Despite the extensive body of literature that aims to explain the phenomenon of consumer scams, the structure of information in scam relationships remains relatively understudied. The purpose of this article is to develop an agency-theoretical approach to the study of information in perpetrator-victim interactions. Drawing a distinction between failures of observation and failures of judgement in the pre-contract phase, we introduce a typology and a set of propositions that explain the severity of adverse selection problems in three classes of scam relationships. Our analysis provides a novel, systematic explanation of the structure of information that facilitates scam victimisation, while also enabling critical scrutiny of a core assumption in agency theory regarding contract design. We highlight the role of scam perpetrators as agents who have access to private information and exercise considerable control over the terms and design of scam relationships. Focusing on the consumer scam context, we question a theoretical assumption, largely taken for granted in the agency literature, that contact design is necessarily in the purview of the uninformed principal