Research and case studies- In June 2017, British Telecoms (BT) ended its relationship with PwC, which had been in place since 1984, Singapore

Assignment Details:

In June 2017, British Telecoms (BT) ended its relationship with PwC, which had been in place since 1984, and appointed KPMG as its new auditor. Prior to this, the UK Financial Reporting Council had launched a probe into PwC’s audits of BT’s financial statements for the years between March 2015 and 2017.

The discovery of accounting irregularities in BT Italia, part of the group’s global services division, led to a £530m write-down after concerns were raised by a whistle-blower. BT’s investigations had revealed improper accounting practices resulting in the overstatement of earnings in its Italian business over a number of years. None of the accounting irregularities was picked up by PwC, BT’s senior management or its audit committee (Adapted from Financial Times, 29 Jun 2017)

Despite tighter regulations by the authorities, there are still accounting scandals such as BT arising.

Required

Critically evaluate the impact of auditor’s independence and objectivity on audit quality, citing relevant literature, research and case studies to justify your arguments.