The Importance of Alternate Auditing for more Independent and Higher Qualified Auditing Services: an Exploratory Essay Based on the Perception of Brazilian Corporations Managers

Abstract

    The main purpose of auditing in corporations listed in the stock market is to protect the interest of stock market investors, by providing them with trustful information on the financial statements disclosed and enhancing the transparency of the company’s actions. This essay intends to identify the effect of alternate auditing on the independency and quality of services provided by the external auditors, in accordance with the perception of managers from big Brazilian Corporations. Using an exploratory working system combined with qualitative methodology, the essay was based on the perception of 26 managers of the 100 biggest Brazilian Corporations by market value. The analysis on the results obtained has led to the conclusion that the implementation of alternate auditing, as per the perception of such group of managers, has not contributed so far for the independency or quality of auditing services provided by external auditors. In their opinion, the alternation of auditors from the same auditing firm would be enough to keep the auditor’s independency. The results therefore suggest that the introduction of such practice has not brought satisfactory solutions for the possible conflicts that may arise between the client and the contractor. As the essay has taken into consideration only one of the aspects that influences the relationship between clients and auditors, it is reasonable to assume that the results achieved may contribute for new actions from the regulatory agencies, aiming to improve the issues of independency and quality of auditing services by other means.