ACC3600-Group-Presentation-Hayley.docx - Introduction;...

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The Legal Environment Today
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Chapter 2 / Exercise 08
The Legal Environment Today
Cross/Miller
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Introduction; - Today we will be presenting an in-depth analysis of a paper written by three  researchers, Alex Lyubimov, Vicky Arnold and Steve Sutton called “ An Examination of the  Legal liability associated with Outsourcing and Offshoring Audit Procedures” . We will be looking at the research question of this paper, why its important and what the  authors did about it. (say who is doing what) 1-  What is the research question?  The overall research question is what are the effects of  outsourcing and offshoring auditor work on legal liability and specifically the location of the  provider either onshore v offshore and the source of the work either insourced (i.e. in house)  v outsourced.  In particular the researchers pose 4 questions or hypothesis to study this effect.  When an audit failure occurs: 1. Does choosing to outsource audit procedures to another firm lead to higher  compensatory damages (i.e. damages necessary to replace what was lost)? 2. Does the difference in assessed compensatory damages between insourced  and outsourced auditor work increase if the outsourced work was offshored? 3. Does choosing to outsource audit procedures to another firm lead to higher  punitive damages (i.e. damages awarded to punish)? 4. Does the difference in assessed punitive damages between insourced and  outsourced auditor work increase if the outsourced work was offshored? 2-  Why is it important?  The research into the effects of outsourcing and offshoring on legal liability is  important as:  1. Outsourcing is increasing:  There is an increasing prevalence of  accounting firms outsourcing and offshoring particularly to India which is  country cited as conducting the most outsourced audit work for North  American CPA firms. Whilst this is an American study, it still has 
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The Legal Environment Today
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Chapter 2 / Exercise 08
The Legal Environment Today
Cross/Miller
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