The main challenges:
- Conflict of interest - Audit firms are profit-driven entities, and face pressure to act in their clients’ favour.
- Race against time – Pressure to not look too thoroughly at figures in order to get the job done on time.
- Great expectations – Investors expect auditors to detect fraud, because they have the access and the ability to. But there is an expectation gap in what auditors do and what the investing public think they do.
- Establish an independent escrow authority handle the negotiations and payments and define the auditing scope. Audit reports should then be sent to this central regulatory authority.
- Stricter enforcement and actual penalties for auditors that have plainly been negligent, or criminal, in their tasks.
- Whistleblowing policy to encourage reporting without the fear of repercussions.
