Two in three Singaporeans unsure of what an auditor does: poll

Only 31% could properly define the role and functions of an auditor.

Whilst 52% of Singaporeans are well aware of the critical role played by auditors in avoiding company failures, more than two-thirds of the public are not entirely sure of what auditors do, the latest survey by the Association of Chartered Certified Accountants (ACCA) revealed.

The poll, which surveyed 11,000 people across 11 countries of which 1,000 were from Singapore, found that a quarter (25%) of respondents expect auditors to detect and report any fraud. That said, the report’s researchers found that the knowledge of what auditors do is generally poor.

“The role of an auditor essentially is giving an opinion on whether the financial statements give a true and fair view of the financial position and performance of the company,” ACCA noted. “When asked to define the role of an auditor, only 31% of respondents from Singapore were able to do so.”

Whilst avoiding company failure is primarily the responsibility of a company’s management, the reality is audit may identify some conditions that could lead to a company’s failure in the future.

“This may explain why about half of those questioned believe auditors are responsible for avoiding company failures – the highest of all 11 countries featured in the survey,” the association explained. The report also notes that there will always be risks to a company that the audit does not currently address, such as the sustainability of the company’s business model.

ACCA noted that the general public have high expectations from auditors when it comes to detecting and reporting fraud; and a substantial number of respondents believe that the audit process can and should play an integral role in company safeguarding, with 65% of Singaporeans believing audit should evolve to prevent company failures.

According to Maggie McGhee, executive director for governance at ACCA, the survey highlights challenges for the accountancy profession, regulators and government in how to respond to public expectations of audit.

“The profession has long spoken about the expectation gap in audit, and our research highlights the failure of the gap to close. Globally, it is clear that further education on the auditor’s role is required, backed by a proactive approach from the profession to address public concern,” she said.