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Objectivity and independence: the dual roles of external auditors and forensic accountants

Di Gabriele, James and Ojo, Marianne (2013): Objectivity and independence: the dual roles of external auditors and forensic accountants. Forthcoming in:

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This paper is aimed at illustrating that certain capacities exist whereby the dual role of the external auditor (in undertaking internal audit roles as well as skilled persons roles) could be exercised to the optimal and maximum benefit of an entity or organisation. It also aims to accentuate on why a return to and focus on traditional auditing techniques, as well as auditing techniques which focus on internal controls is a much needed move. In so doing, it contributes to the extant literature by highlighting why such a move should be facilitated, as well as proposing means whereby such a move would be facilitated - namely, through a focus on benefits which could be derived where the external auditor is able to incorporate certain internal audit responsibilities. The paper also draws attention to safeguards which require due consideration if the ever important attributes of objectivity and independence are not to be compromised. Risks associated with the overlapping roles of testifying and consulting experts in Forensic Accounting will also be considered in this paper.

Whilst the benefits and potentials of the dual roles assumed by external auditors are emphasized, as well as the need to ensure that safeguards operating to guard against a compromise of objectivity and independence are in place, authors' opinions in support of dual roles also take into consideration the utmost priority of ethical values. The paper hence also highlights the fact that such dual roles are appropriate in certain cases – as illustrated by justifications for limitations imposed by the Sarbanes Oxley Act and other relevant and applicable legislation – even though instances also persist where section 201 of Sarbanes-Oxley, with regard to internal audit outsourcing, may have been over-reactionary and may continue to hinder both companies and their auditors.

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