The role of Maltese statutory auditors towards serving public interest : an analysis

Abstract

PURPOSE: The research objectives of this study were to identify the statutory auditors’ awareness and interpretation of the terms ‘Public’, ‘Interest’, ‘Public Interest (PI)’, ‘Public Interest Entities (PIEs)’ and ‘Other Entities of Public Interest (OEPIs); to assess auditors’ perception on how the PI can be safeguarded and best served, including an understanding of the auditor’s awareness of the additional obligations arising when auditing a PI client; and to consider whether to treat additional entities or categories of entities, as PIEs, in the Maltese context whilst excluding others. DESIGN: To attain the research objectives, a mixed methodology approach was implemented. To collect qualitative data, individual semi-structured interviews were conducted whilst to collect quantitative data, a questionnaire was distributed to several auditors within the Malta Institute of Accountants (MIA). FINDINGS: The findings exhibit that the definition of PI is ambiguous for today’s auditing profession and thus, it becomes more challenging to establish an adequate concept. Therefore, incorporating the new concept of OEPIs to the local scenario would enable a broad spectrum of entities to be merged, leading to the establishment of a superior definition. Additionally, PI enhances communication, and thus should be upheld to continue nourishing the profession and developing credibility and trust within reporting. Also, recently, the public is getting involved in various aspects and this enables the consideration of other entities. CONCLUSIONS: The study concludes that the role of Maltese statutory auditors is becoming more demanding since serving towards PI is core. Thus, it should be considerably safeguarded and preserved so as transparency, accountability and reliability will enhance. This will all result in reaching a common goal towards performing in the interest of the whole society. VALUE: The study complements the Maltese scenario since it extends the knowledge on the need of improving the adoption of PI and the way the principle is incorporated within the auditing profession. It purports why a common interpretation is salient because it will serve as a guide to accomplish common goals, reduce misunderstandings and achieve a solution when dilemmas emerge.