ABSTRACT
The surge of importance and concern given to the role of auditors is apparent since the scandals of Enron and World Com. These scandals are not only prevalent in the United States but also in developing countries like Ghana. The main aim of the study was to examine the role of junior auditors in small accounting firms in the Accra Metropolis. The study was conducted using qualitative research design. The study adopted purposive sampling technique for the selection of interview respondents. Semi-structured interviews were used to collect data from junior auditors in small accounting firms in the Accra metropolis. Data collected was analyzed using thematic analysis.
From the findings of this study, it was discovered that junior auditors do not only perform supporting administrative roles but also technical roles as well. The findings revealed that junior auditors are involved highly in all the stages of audit assignment and their involvement significantly increase audit quality and effectiveness. Some challenges however hinder the work of junior auditors include inadequate compensations, lack of work opportunities among others. Based on the findings of the study it is concluded that junior auditors play significant roles among small accounting firms in Ghana. Through their supportive roles in administration and technical work on auditing, junior auditors have become indispensable human resources for improving the effectiveness of small accounting firms in Ghana. The study recommends accounting firms, both small and big, to harness the potential of junior auditors, supervise them and provide the necessary technical training to contribute more effectively to the quality of auditing process which is aimed at contributing significantly to policy making, practice and knowledge on the industry standard of audit professionals in order to avert future financial crisis as poor auditing could lead to financial
consequences.
CHAPTER ONE
- Background of the Study
INTRODUCTION
Over the years, the importance of auditing and the role auditors play in ensuring proper financial regulation practices have been discussed. Audit firms and auditors as well as accounting professional play important role in the demand for statement in both regulated and unregulated business environment (Bills and Stephens, 2016). According to Francis, Khurana, Martin, and Pereira (2011) the demand for auditing by both small and big firms have increased due to the general understanding of stakeholders on the relationship between financial reporting quality and audit quality. This has facilitated the constant demand of auditors at all levels (Gaynor, Kelton, Mercer, & Yohn, 2016), and the relevance of the accounting and auditing profession uplifted.
In the current global competitive environment, auditing has enjoyed the benefit of promotion as engendering technology with the capacity to promote some kind of social order (Otusanya & Lauwo, 2010). Accountants, as auditors, have cemented their status and privileges on the basis of claims that their expertise enables them to mediate uncertainty and construct independent, objective, true and fair accounts of corporate affairs (Sikka, 2009). However, there has been counter argument that, such claims are not good indicators of corporate performance, because most economies, especially those based on the capitalist are prone to crises (Sikka, 2009). This also due to the fact that, the claim of expertise are often confronted with unexpected corporate collapse, fraud, financial crime and general crises that those expertise are not able to salvage.
In Ghana, the spate of corporate failures, witnessed in the financial sector in recent times, have brought the auditors into limelight and many public commentators have questioned the role of accountants and auditors (Bley, Saad, & Samet, 2019). The closure of some banking institutions such as Capital Bank and UT Bank among others and subsequent investigation by the regulator and other stakeholders did not exonerate accountants and auditors of those banks (Amartey, Yu, & Chukwu-lobelu, 2019). With the recent banking crisis in Ghana members of the auditing profession in Ghana are once again in the limelight, as the banking crisis and the revelation of unethical practices by bank executives and board members has raised many questions about the ethical standards of the accounting profession and about the integrity of financial reports issued by professional accountants (Bley et al, 2019). Even though the Ghanaian banking sector has been exposed financial innovations and technological improvements including the implementation of cashless systems that make banking convenience (Apau, Obeng, & Akonnor, 2019), unethical financial practices have brought the banking industry under serious criticism from the public (Amartey et al., 2019). At the receiving end of these criticism are the auditing professionals.
The recent banking crisis has shifted focus on the role of accountants and auditors. Whilst big audit firms and senior auditors may face the brunt of public criticism on the auditors, there is yet another set of group, whose expertise and experience could be greatly tapped to ensure audit quality at all levels of auditing. Junior auditors, or entry level audit professionals remain potential assets in the auditing profession (Kavanagh & Drennan, 2008). Whilst many studies have focused on the role of senior auditors or big auditing firms, less attention has been paid to the role junior auditors could play in ensuring audit standards and audit qualities. This study therefore, intends to examine the varied roles that junior auditors are playing in small accounting firms in ensuring audit standards
and quality. The study will be useful to the audit firms because it would provide insights to
help assess the value of potential junior auditors in the industry. The study is further aimed to identify the challenges and workloads of junior auditors in the audit firms to help map up strategies that could identify solutions aimed at building competent auditors for the financial sector.
