Regulation and enforcement
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Regulation and enforcement

Regulation and enforcement

Regulation and enforcement
Regulation and enforcement

ICAB indicated that it never had to enforce regulations or censure practitioners as a result of poor audits since there was generally strict adherence to standards. Hence, there were no known cases of revocation of the practising certificates of auditors in Barbados. ICAB also indicated that the investigation of fraud was left to certain bodies such as the law, which is vested with the power to investigate and take action in certain fraudulent activities.
There was consensus among the interviewees that auditors should be held responsible if it could be proven that poor audits were conducted. This view was presented in light of the standards that the auditor must follow. Within Barbados, auditors agreed that they followed Generally Accepted Auditing Standards (GAAS), as failure to do so opens them to litigation. It was further pointed out that the engagement letter also sets guidelines that should be followed by the auditor.
What is expected of the audit profession in Barbados seems to stem from the development of the profession’s role in fraud detection in the USA and UK. However, there were no local cases to show what the courts in Barbados decided in such situations. Even in the past corporate failures in Barbados, no mention was ever made of the auditors and/or management being sued. In the 1980s, Trade Confirmers Limited (TCL), a local financial institution, closed down as a result of suspected fraud and the Government launched a major commission of inquiry (Worrell Commission) into its collapse. The inquiry revealed fraud, corruption, mismanagement and incompetence. Leacock (2001, p. 270) related that interest rates exceeded the maximum statutory limit that led to illegality and non-repayment of interest by borrowers. In addition, top management had converted corporate funds into personal use. The Commission’s terms of reference did not allow it to proceed with any legal action against those at fault but it suggested that the matter be referred to the law courts for determination. No litigation was ever brought against auditors or management, nor did the inquiry result in the return of deposits to clients. No reason was ever given for the failure to prosecute guilty parties.
At the time of writing, there was an investigation into fraud (theft of money) at BICO Limited, a local public limited company. BICO Limited is currently claiming Bds$3 million in damages against its previous auditors, PriceWaterhouseCoopers, for not uncovering irregularities between 1995 and 1999 (Daily Herald, 2004).

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