Audit materiality and environmental matters

Chiang, CKH; Northcott, D

Audit materiality and environmental matters

aut.researcher	Chiang, Christina Kee Hua
dc.contributor.author	Chiang, CKH
dc.contributor.author	Northcott, D
dc.date.accessioned	2011-07-12T03:54:01Z
dc.date.available	2011-07-12T03:54:01Z
dc.date.copyright	2010
dc.date.issued	2010
dc.description.abstract	Purpose – This paper examines the issue of audit materiality in regard to the disclosure of environmental matters in financial reports. Its purpose is to reveal auditors’ views and practices when judging the materiality of environmental matters. It also highlights implications for how environmental matters are audited and for the reliability of financial reporting by firms whose activities may generate adverse environmental effects. Design/methodology/approach – In-depth, semi-structured interviews were conducted with twenty-seven senior public and private sector financial auditors in New Zealand. Findings – The findings reveal that auditors’ interpretations of materiality criteria tend to preclude them from considering environmental matters in their audits. This contributes to a ‘type II audit expectation gap’ – i.e. a gap between the expectations of standards setters and the practices of auditors (Specht and Waldron, 1992) – which impedes the achievement of appropriate, independent assurance on environmental matters in financial reports. Originality/value – This paper is the first to draw on interview evidence from auditors to examine how they deal with the issue of materiality in regard to this important, emerging aspect of audit practice. Research limitations/implications – This study was conducted in a New Zealand context only. However, since auditors’ duties are similar the world over, the findings point to general avenues for promoting improved practice in regard to the audit of environmental matters.
dc.identifier.citation	The Australian National Centre for Audit & Assurance Research - 8th Annual Australasian Audit Research Forum, Canberra, 2010-12-03 - 2010-12-04
dc.identifier.uri	https://hdl.handle.net/10292/1423
dc.publisher	AUT University
dc.relation.uri	http://ancaar.fec.anu.edu.au/news/documents/2010ANCAARChiangNorthcott.pdf
dc.rights	NOTICE: this is the author’s version of a work that was accepted for publication. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in (see Citation). The original publication is available at (see Publisher's Version)
dc.rights.accessrights	OpenAccess
dc.subject	Audit materiality
dc.subject	Environmental matters
dc.subject	Financial audits, Audit expectation gap, Auditing profession
dc.title	Audit materiality and environmental matters
dc.type	Conference Contribution
pubs.organisational-data	/AUT
pubs.organisational-data	/AUT/Business & Law
pubs.organisational-data	/AUT/Business & Law/Accounting