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Title: Financial audit report modifications in Malta
Authors: Baldacchino, Peter J.
Bezzina, Frank H.
Tabone, Norbert
Vassallo, Jean Paul
Keywords: Auditing -- Malta
Auditing -- Quality control
Financial statements -- Malta
Business enterprises -- Auditing
Auditing -- Law and legislation -- Malta
Issue Date: 2014
Publisher: Governance Research and Development Centre, Croatia & University of Malta, Faculty of Economics, Management and Accountancy, Department of Insurance
Citation: Baldacchino, P. J., Bezzina, F. H., Tabone, N., & Vassallo, J. P. (2014). Financial audit report modifications in Malta. Journal of Corporate Governance, Insurance and Risk Management, 1(1), 107-124.
Abstract: This paper analyses the modifications of financial audit reports of Maltese companies between 2005 and 2009. It examines the audit reports of a random sample of 374 limited liability companies registered with the Registry of Companies in Malta. The study shows that the average 2005- 2009 modification rate in Malta stood at 22.4%, this representing an increase over previous periods. Most modified reports were noted in the case of private exempt and international trading non-exempt companies. Generally, private exempt companies had their audit report qualified on the basis of a limitation of scope, whilst most international trading companies had their reports qualified on the basis of disagreement with management. Furthermore, the “small company qualification” (which has been long abolished) was still incorrectly being used in Maltese audit reports till 2009. The results therefore show that there is still room for improvement in audit reporting in Malta. Whilst the Big Four audit firms do not appear to have issues in appropriately adhering to audit reporting standards, Maltese smaller audit firms and sole practitioners were found still to be the main cause for inappropriate audit reporting. Towards improvement, the study provides various recommendations including: a more consistent regulatory framework, stricter enforcement of quality assurance, and the reconsideration of the statutory small audit. Such recommendations may also be applicable to other jurisdictions.
ISSN: 2757-0983
Appears in Collections:JCGIRM, Volume 1, Issue 1, 2014

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