COREGULATION OF FRAUD - DETECTION AND REPORTING BY AUDITORS IN AUSTRALIA - CRIMINOLOGYS LESSONS FOR NONCOMPLIANCE

All companies (other than exempt proprietary ones) are required by the Corporations Law to have their books audited. For about 150 years the re has been a controversy surrounding the auditors' role -- whether th ey should be functioning as a 'watchdog' or a 'bloodhound'. In recent years the auditing profession in Australia has been experiencing a cre dibility crisis. A spate of much publicised corporate collapses in the late 1980s at a time of economic recession has been instrumental in: (i) the Australian Securities Commission (ASC) adopting more heavy-han ded ways of policing auditing standards; (ii) rocketing audit fees; an d (iii) the accounting bodies redefining their role and revising audit ing standards. This paper focuses on current approaches to regulating the auditing profession, and discusses their effectiveness, drawing on the criminological literature relevant to professional advisers, whit e collar illegality, and deterrence.