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Abstract:
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The 1st of December 2008 a press release was received in all the Danish editorial offices with the
following text;
”IT Factory A/S which is 50% owned by JMI Invest is today declared liquidated by the board of
directors , and the managing director Stein Bagger is reported to the police for systematic fraud for
at least 500 million.DKK. Stein Bagger disappeared last week during a trip in Dubai….”
This started huge press coverage of what is now known as the IT Factory case. Some of the things
that were written and said got me, the writer of this thesis, wondering if the case has made an expectation
gap visible, and whether or not this could end out in changes of the future work of the
auditors.
This is the questions that I try to answer in this thesis during an analysis and a discussion. The analysis
has focus on the interview persons’ expectations of the work done by the auditors at IT Factory
compared with the regulation of auditors then in force and the audit practice.
Before carry out the analysis, a short description of the characteristics of the IT Factory case is given,
followed by a theoretical review of the phenomenon expectation gap and the regulation of auditors
then in force included descriptions of the audit practice I know from my time as an auditor.
The discussion is carried out in the light of the expectation gap ascertained in the first analysis and
has focus on how the gap can be closed or reduced. Also the wishes that some of the interview persons
came with during the interviews are included in the discussion. The discussion is based on the
cost-benefit relation as well as the amount of work the change or new action expect to cause.
The conclusion is that the expectation gap is smaller than expected and that only in relation to one
of the two areas where the gap was fund, an introduction of a new audit action to close the gap is
seen as being realistic based on the discussion. Two of the three wishes that interview persons came
with during the interviews were fund realistic to introduce based on the discussion. One of these
two wishes is related to the enquiry of more openness from the auditors’ side, which could close the
gap on other areas maybe even in relation to audit in general.
I think openness in relation to audit is necessary if the line of audit in the future would like to have
the confidence from the society which is needed to secure the auditors roll as the representative of
the public’s interest but the overall question in relation to this is whether or not the auditors will
work for or against more openness? |
