The Combat of Corruption and the Crucial Role of the Accountancy Profession – The Expectation Gap

Date : 28/01/2020

The Combat of Corruption and the Crucial Role of the Accountancy Profession – The Expectation Gap

Major dysfunctions within enterprises and governments involving corruption and fraud, have caused waves of social indignation. Society sets increasingly higher expectations that have changed the environment for the professional accountant in an audit role. A seminar in December 2019 organised by Transparency International Belgium and IBR/IRE, the Institute of Registered Auditors. The seminar addressed this "Expectation Gap” about the effectiveness of registered auditors in detecting and reporting matters of corruption, and the possible responses from the accountancy profession to cope with this gap.

The seminar attracted participants from the accountancy professions. Prominent speakers from EY Belgium, the Belgian Audit Oversight College CTR-CSR, Transparency International Belgium, the Vrije Universiteit Brussel and Institute of Fraud Auditors gave their views on the “Expectation Gap” and what might need to be done in light of it. The seminar concluded with a panel discussion chaired by the European Director of the ICAEW.

A major conclusion was that more investment should be made in training to develop a more sceptical mindset to address possible corruption and fraud and to make optimal use of existing tools and techniques when applying standards in the audit process. In this context a number of proposals were put forward including:

Regarding the “Expectation Gap”, there are three parties involved, the registered auditor, the audited enterprise and the public be they shareholders, consumers or customers. For third parties it may be difficult to determine the quality of an audit. It should, perhaps, be the role of professional associations of accountants and auditors, regulators, public authorities and entities to clarify the different roles in detecting corruption and fraud.