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Are auditors law‐abiding citizens?

Are auditors law‐abiding citizens? The auditing and accounting profession must provide appropriate disclosure of the going concern status of an entity, especially when that status is threatened. Auditors have an obligation to consider the wider legal environment of an entity, including all relevant case law, when they perform any such audit. Despite this obligation, the auditing profession appears to violate important legal principles. The auditor’s approach to the going concern status of an entity is contained in the South African Auditing Standard, SAAS 570 “Going Concern”. The South African legal framework’s approach to this issue emerges from the Supreme Court case Philotex (Pty) Ltd v Snyman. This article explores the fundamental disagreement between the auditor’s approach to the going concern problem and that adopted in terms of the wider South African legal framework. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Meditari Accountancy Research Emerald Publishing

Are auditors law‐abiding citizens?

G. Geva
Meditari Accountancy Research , Volume 12 (2): 25 – Oct 1, 2004
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References (1)

Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
1022-2529
DOI
10.1108/10222529200400015
Publisher site
See Article on Publisher Site

Abstract

The auditing and accounting profession must provide appropriate disclosure of the going concern status of an entity, especially when that status is threatened. Auditors have an obligation to consider the wider legal environment of an entity, including all relevant case law, when they perform any such audit. Despite this obligation, the auditing profession appears to violate important legal principles. The auditor’s approach to the going concern status of an entity is contained in the South African Auditing Standard, SAAS 570 “Going Concern”. The South African legal framework’s approach to this issue emerges from the Supreme Court case Philotex (Pty) Ltd v Snyman. This article explores the fundamental disagreement between the auditor’s approach to the going concern problem and that adopted in terms of the wider South African legal framework.

Journal

Meditari Accountancy Research – Emerald Publishing

Published: Oct 1, 2004

Keywords: Going concern problem; South African Auditing Standard SAAS 570 “Going Concern”; South African legal framework; Audit stance; Legal stance; Audit and legal paradigms clash

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