The Expectation Gap Regarding Money Laundering: An Analysis of the Expectation Gap between Auditors and the Public Regarding the Role of the Audior in Combating Money Laundering in Danish Banks and How to Reduce It

Andreas Mørch Sørensen

Student thesis: Master thesis

Abstract

In recent years, auditors and audit firms have experienced massive publicity in the media and increased interest by the public due to scandals regarding undiscovered money laundering in large financial institutions. The undiscovered money laundering in the financial institutions has made the public question the auditors’ role in combating money laundering during the statutory audit of the annual accounts. The purpose of this thesis is to investigate the existence of an expectation gap in regard to the audit of (anti) money laundering in Danish financial institutions and how this can be reduced.
Both the public and the Danish Business Authority have questioned the requirement on auditors to identify and combat money laundering as part of the statutory audit and are hinting a gap to the existing laws and standards regulating the audit of financial institutions. The focus of the thesis has been Danish banks. By using Brenda Porter’s and Bent Warming Rasmussen’s theories on the expectation gap, this thesis seeks to investigate and examine the expectation gap in regard to the audit of money laundering during the statutory audit from two positions: the auditor’s position and that of the general public. Both the auditor’s and the general public’s positions have been examined through a general questionnaire.
In order to obtain a more detailed understanding of the auditors’ role in combating money laundering and the auditors’ own perceptions, an additional questionnaire has been sent to certified banking auditors. Based upon the obtained data it has been possible to conclude the existence of an expectation gap in regard to the auditor’s role in combating money laundering, which consists of a performance gap between existing laws and standards and the public’s expectations.
As the thesis has proven the existence of an expectation gap between the auditors and the public, the thesis seeks to propose measures, which may contribute to reducing the expectation gap. Through the obtained knowledge in the thesis, a suggestion for how to reduce the performance gap is submitted.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2020
Number of pages87
SupervisorsKim Klarskov Jeppesen