Opinion shopping within the Maltese audit environment : an analysis

Abstract

Purpose: This dissertation ascertains the extent to which opinion shopping (OS) is perceived to exist or might exist within the Maltese audit profession. The key research objectives of this study include the identification of common situations and factors within the audit environment which may imply OS and also an evaluation of how this practice is and might be tackled by the profession. Design: The objective of this study was achieved through a mail survey conducted with a sample of 119 audit practitioners further enhanced by 15 personal interviews. Findings: This study reveals that the difficulty lies in determining whether any opinion seeking is actually OS or merely looking for a second opinion. The focus must be on the motive behind such opinion sought, which in itself is very difficult to determine and necessitates an examination of the red flags indicating OS. Such factors and situations are qualified opinion or disclaimer of opinion, deteriorating auditor client relationships, deteriorating financial and operating conditions and also owner managed companies. There was agreement that the profession is not to tackle this by seeking more regulation but to ensure more compliance with current regulations, particularly in the area of professional clearance. Value: This study recommends expanding disclosure requirements on auditor changes, on seeking a second opinion and on deteriorating financial conditions. It also recommends implementing peer review programs.