Auditing in 21st Century: Has Self-Regulation Failed?

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From the very beginning, auditing is pretty much a self-regulated profession and has some ethical rules of thumb to follow in practice. But the plethora of recent corporate failures and scandals where auditors’ instrumental role is evident in many instances raise question about the validity and suitability of “self-regulation” in auditing, especially in the 21st century where auditors need to perform auditing in ever complex risk management process. Moreover, to restore the market confidences within the auditing profession and to raise the overall audit quality, many countries are establishing some super regulatory bodies to oversee the functions of auditing and auditors. Based on the “documentary research methodology”, the author examines whether “self-regulation” in auditing has completely failed in the 21st century. The author reveals that “self-regulation” in auditing has not completely failed; rather, a joint approach is needed to raise the overall quality of auditing where there will be equilibrium between “self-regulation” and statutory directive.