Good service falls by the wayside.

The study, commissioned to examine the perception of the audit among auditors, finance directors and stakeholders, found that the providers of audits and those who obtain them have very different views of the process.

While auditors distinguish between the perceived technical aspects and service aspects of the job, those buying the audit didn’t see any difference.

‘Competence and independence are the technical parts of the job we normally look at,’ said Professor Angus Duff, author of the report. ‘But service quality – the relationship with the company and the provision of other services – are just as crucial.’

The report argued that competition and slow growth in the UK audit services market over the last 20 years has created downward pressure on audit fees, while the profession has also been affected by the globalisation of business, commercialisation of practice and stakeholder dissatisfaction with audit quality.

This, coupled with the accounting scandals in the US, has forced auditors to concentrate on improving the quality of their service, while maintaining the technical effectiveness of their work to restore profitability.

The study made several recommendations, notably the need for auditors to do a better job of marketing themselves by emphasising the qualities most important to clients. ‘Auditors should also be putting in place systems to monitor the perception of audit quality, as well as the audit quality itself,’ Duff said.

The Scottish Institute’s research found that, out of the Big Four, only KPMG focused on services, alongside only a few medium-sized firms.

Although the service element of the job is increasingly important, Duff warned that those who see themselves as ‘relationship managers’, selling a mix of professional services, could get too close to those they audit.

‘Auditors need to remember their real client is the end-user of financial statements,’ he said.