- Ability to find misstatements depends on the auditor’s technical competence. Likelihood of reporting them is determined by the degree of auditor's independence, says Lasse Niemi, Professor of Accounting and Auditing at Aalto University School of Business. 
According to Niemi, as the investor cannot observe the actual level of audit quality, she makes a ‘guess’ based on the image of the suppliers of audits and their supervisors. If there is no trust on the auditors or their supervising bodies, there is no value for the investors.
New regulation brought major changes
Niemi describes the major developments of the audit quality globally as follows:
- In short perspective there has been several high profile corporate scandals on the both sides of the Atlantic in early 2000's (Enron and WorldCom in the US; Parmalat in Europe). In the States this caused the development of new regulation (the Sarbanes–Oxley Act) and end of self-regulation. Also a new regulatory body of auditing (Public Company Accounting Oversight Boardin, PCAOB) was established.
- In Finland, the deregulation of capital markets in the late 1980 and joining the EU in 1995 were the major changes. In consequence the introduction of the first Auditing Act to implement EU legislation on auditing to Finnish legislation. Prior to this, the rules and regulations on auditing were in other laws, e.g. in the Company Law, says Niemi.
The Department of Accounting of the Aalto University School of Business will organize a seminar on audit quality on Monday, 22 April. The seminar will discuss eg. the future of auditing and the major developments of the audit quality. The guest speakers include Professors David Hay and Stuart Turley.
Professor Niemi says that the seminar aims at fruitful discussion of the audit regulators, supervisors, researchers and auditors on the recent developments and which way we are going in the future.
Seminar on Audit Quality 22 April
Welcome to hear about the future of auditing and what are the major developments of the audit quality.
The seminar is organized on Monday 22 April at 1 pm at the Chydenia building of the School of Business, PwC hall (1st floor), Runeberginkatu 22-24, 00100 Helsinki.
The event is targeted at those interested in auditing and its development, including regulators, members of the audit oversight bodies, auditing professionals and students.
The key note speakers are distinguished professors and researchers in the field of auditing and accounting:
- The Future of Auditing- Professor David Hay, University of Auckland, New Zealand. See Hay's bio
- Audit Regulation and Promoting Audit Quality in Practice - Professor Stuart Turley, Manchester Business School, Great Britain. See Turley's bio
Insights and views on audit quality and regulations by:
- Professor Teemu Malmi, Head of the Department of Accounting, Aalto University School of Business
- Professor Pontus Troberg, Hanken School of Economics, Member of the Auditing Board
- Ms Tiina Torniainen, Partner, KPMG
- Ms Arja Talma, Senior Vice President, Kesko Corporation
The seminar is followed by cocktails.
The event is organized and hosted by the Auditing Board (TILA) and the Department of Accounting at Aalto University School of Business.
Registrations to the seminar. The event is open and free for everyone.