Statutory Auditors’ Independence in Select Corporate Accounting Scandals Since 1990: A Comparative Study

Abstract

In this chapter, an attempt has been made to critically review statutory auditor independence in five high profile accounting scandals selected from each of the five select countries and to conduct a comparative analysis of them. The five scandals occurred at Enron, Polly Peck International, Satyam, Zhengzhou Baiwen and ComRoad AG. The analysis shows that a lack of professional scepticism of statutory auditors is a major sign of impaired independence in a corporate failure. Fundamental issues governing audit procedure, such as appointment, remuneration, non-audit services, tenure, the role of the audit committee, the role of audit inspection mechanisms and the disciplinary framework have always played a significant role in controlling statutory auditor independence in each of those corporate accounting scandals. Hence, every time a scandal occurred, these fundamental issues were revisited by the regulatory authorities.