Business

Businesses concerned over auditors’ integrity - FMA

Investors have a wariness about auditors who check company finances because they believe they lack independence and there is not enough competition in the sector.

Research by the Financial Markets Authority has found 56 percent of investors trusted auditors to act with integrity, while 48 percent believed their work was of high quality.

However, they raised concerns about conflicts of interest and auditors' lack of scepticism when challenging financial statements, because companies could easily replace them.

In contrast, almost all of the auditors surveyed said they acted with integrity, amidst sufficient competition, and 68 percent of company directors surveyed agreed.

"While we can see that overall confidence is positive, serious expectation gaps exist among stakeholders," FMA chief executive Rob Everett said.

"Investors are the end-user of audit services, in terms of the audited financial information they rely on to make informed decisions about investing their money, so it is critical for auditors to respond to investors' expectations."

More than 350 investors, directors and auditors responded to the online survey between October and February.

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