Auditing profession regulation: Lesson learned from code and common law countries regulatory approaches

Abstract

This paper aims to explore the common regulatory approaches for audit and accounting profession and identify the suitable approach to the Libyan audit profession. Mixed methods both quantitative and qualitative approaches were employed, in which a questionnaire was completed by 196 respondents. Statistical analysis, via the SPSS, was performed on the data. The outcomes are believed to be generalized given the size of the sample. In addition to 9 semi-structured interviews were conducted, representing five stakeholder groups in the Libyan auditing arena. This study has found that the majority of respondents are clearly in favour of the appointment of an independent regulator, believing this to be the most beneficial option of the list available for the Libyan audit profession, while statutory regulation (government intervention) is considered the next beneficial choice. Likewise, the findings from the interviewee exercise show a preference for an independent regulator. Due to the lack of research on governance and regulations among developing countries, this study contributes to the body of literature in respect of the Libyan accounting and auditing environment by specifically exploring the perception of stakeholders towards the existing regulatory approaches implemented in both developed and developing countries. By implication, it makes a contribution to the wider body of knowledge about auditing in the Arab countries, where similar cultural conventions and attitudes exist.