Abstract:
Objective: Accounting advantage is one of the nations’ development indexes. On the other hand, investors or creditors may lose due to auditors’ ignorance in their tasks and auditors’ liability insurance can play an important role in compensating losers’ loss. But this type of insurance has not been developed in Iran and insurance companies didn’t accept its related risks. Thus formulating and planning auditors’ liability insurance strategies in Iran have undeniable importance to develop this type of insurance which has been investigated in this research. Methodology: For this purpose research questionnaires distributed between expert members of Iran’s official auditors society (N=30). Also, for data analyzing Delphi technique, SWOT matrix, Analytical Hierarchy Process (AHP), Dematel technique and Analytical Network Process (ANP) methods were used. Findings: Results of applying Delphi technique and SWOT matrix indicated that developing auditors’ liability insurance in Iran is faced with 6 strengths, 6 weaknesses, 6 opportunities and 7 threats. Also, results of applying AHP showed between strengths, transferring auditors’ task risk criteria, between weaknesses, the ambiguousness of auditors’ liability laws and regulations criteria, between opportunities, the nations’ future need to new insurance criteria and between threats, the low insurance culture in Iran, are prior. On the other hand, results of Dematel technique stated that in order to develop the auditors liability insurance in Iran, the low insurance culture in Iran has the first priority. Conclusion: Finally, results of ordering the development strategies of auditors’ professional liability insurance using ANP showed that the progress strategy (developing auditors’ professional liability insurance notice to the nations’ feature need) is the best strategy. JEL Classification: M41, M49, G32.
Machine summary:
On the other hand, investors or creditors may suffer losses due to the negligence of auditors, and professional liability insurance for Certified Public Accountants can be an effective solution for compensating these victims; however, this type of insurance has not developed in Iran, and insurance companies have not welcomed the acceptance of its related risks.
Methodology: For this purpose, research questionnaires were provided to the community of Certified Public Accountants and senior insurance experts (N=30), and the Delphi method, SWOT matrix, Analytic Hierarchy Process (AHP), DEMATEL method, and Analytic Network Process (ANP) were used for data analysis.
The AHP process results showed that among the strengths, the transfer of risks of accounting and auditing professionals; among the weaknesses, the incomplete and ambiguous nature of current laws and regulations regarding the professional liability of Certified Public Accountants; among the opportunities, the society's need for various new types of insurance in the future; and among the challenges, the low insurance culture in Iran are in the first priority.
Given the expansion of this insurance policy among the community of accountants and also the welcoming attitude of insurance companies, the necessity of research in identifying and modeling the development of strategies, weaknesses, strengths, challenges, and opportunities of professional liability insurance for accountants in Iran becomes evident, which this study addresses.
Therefore, given the above cases and the general scope of auditors' activities, especially in the money and capital market, liability insurance for audit firms should become one of the statutory requirements of the community of certified public accountants (Sevim et al.
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