Affecting Audit Quality Research Articles

Do female auditors affect accruals quality? A replication and extension of Ittonen, Vahamaa, and Vahamaa (2013)

Purpose: This study aims to replicate the findings of Ittonen et al. (2013) on the relationship between female audit partners and accruals quality, which showed that firms audited by female partners had lower abnormal accruals. While their study focused on the Scandinavian context, known for its progressive gender norms, this research assesses the generalizability of their results by extending the analysis to Italy, a country with different cultural views on gender roles. Design/methodology/approach: Using an OLS regression model, this study analyzes Italian listed firms during the 2013-2022 period. We sourced financial data from Aida, provided by Bureau Van Dijk, and we manually collected audit partner names from corporate governance reports. Our final sample includes 1,068 firm-year observations from 232 firms. Findings: Our results are consistent with those of Ittonen et al. (2013), who found that female audit partners are associated with lower abnormal accruals. We observed similar results when including female audit committee chairs. No gender-based differences emerged in reducing income-increasing earnings management. However, female audit partners were associated with lower income-decreasing manipulations, indicating greater diligence and precision. Originality/value: We replicate the study by Ittonen et al. (2013) within the distinct cultural and legal framework of the Italian market, with a broad time period for analysis. Our findings underscore the importance of gender diversity in auditing and provide robust evidence for a different context. Future research can investigate other countries and factors affecting audit quality to further deepen the understanding of gender dynamics.

The impact of industry technology complexity on audit quality

With the continuous upgrading of Chinese industries, industry technology complexity has increased dramatically, to which audited units and audit subjects have adaptive responses, affecting audit quality. However, relevant studies have not been conducted. This paper takes A-share listed companies from 2007 to 2021 as a sample to investigate the impact of industrial technology complexity on audit quality and its mechanism. It is found that industry technology complexity can significantly enhance audit quality; in enterprises at the front-end of industrial technology, industry technology complexity has a more significant role in promoting audit quality. Adopting the demonstration zone for the transfer and transformation of scientific and technological achievements as an exogenous impact policy, the study finds that the impact of industry technology complexity on audit quality still holds. Further research finds that the adaptation of audited units and audit subjects to industry technology complexity has a positive incentive effect on audit quality. The findings extend the audit consequences of industrial technology complexity and provide empirical evidence for the role of industrial technology complexity in enhancing audit quality.

Factors Affecting Audit Quality in Public Sector: A Case Study of District Abbottabad of Khyber Pakhtunkhwa, Pakistan

This study aims to explore factors that affect audit quality in the public sector of District Abbottabad, Khyber Pakhtunkhwa (KP) Province of Pakistan. A purposeful sampling technique is used to find knowledgeable and key respondents from among the audit departments/ firms/ entities in the selected district for this study. The data for this research is collected from 20 government auditors from the Directorate of District Audit and the District Controller of Accounts Offices in Abbottabad district. The researcher used a semi-structured questionnaire (mix of open-ended and close-ended) as a tool for data collection from relevant respondents. The main themes in the questionnaire are analyzed through SPSS software, and the data is presented in tables and figures, which are supported by descriptive discussions and analysis. Also, some of the discussion is based on informal interviews with auditors, which were analyzed manually through the matrices method of qualitative data analysis. It has been found that lacking financial independence and resource constraints; bad behavior of auditees; training of the auditors and new audit techniques; inadequate staff; insufficient time for Audit; corruption and misuse of audit facilities; and promotions of auditors are the major factors affecting the quality of Audit in District Abbottabad.

Factors Affecting Audit Quality with Remote Audit as a Moderation Variable (Case Study at Certification Body - XYZ)

Factors Affecting Audit Quality with Remote Audit as a Moderation Variable (Case Study at Certification Body - XYZ)

Research on the Impact of Financing and Short selling System on Audit Quality

The margin trading and securities lending system, as a new type of financial tool, has a significant impact on the Chinese capital market, affecting audit quality from the perspective of credit information disclosure. This article selects A-share listed companies in Shanghai and Shenzhen from 2007 to 2023 as samples and uses a double difference model to study the impact of margin trading and securities lending on audit quality. Research has found that after the implementation of the margin trading and securities lending system, the audit quality of margin trading and securities lending target enterprises has significantly improved compared to non-margin trading and securities lending target enterprises. Therefore, while improving the margin trading and securities lending system, we should leverage the combined efforts of internal control and audit supervision to improve audit quality.

Audit Quality Control and Financial Risk Prevention Strategies for CPAs under Multi-Objective Optimization Calculation Considering Sustainable Development Strategy

Abstract Audit functions as the “guardian” of the capital market by overseeing economic activities and providing forensic analysis on the major projects and financial transactions of the entities it examines. The sustainability of auditing as a profession hinges critically on audit quality. This study aims to investigate the characteristics and elements that influence audit quality control, employing modern risk-oriented audit theory to formulate a financial audit risk assessment process. The research uses a multiple linear regression model to analyze factors affecting audit quality control among certified public accountants (CPAs). The model analyzes data from 513 A+H share listed companies, with parameters estimated using the Singular Value Decomposition (SVD) method within an overall least squares framework. Furthermore, the Particle Swarm Optimization (PSO) algorithm, a technique within the multi-objective optimization algorithm suite, is utilized to refine parameters in the manipulability Jones model. This adjustment is intended to better quantify the level of earnings management of the audited entities, thus enhancing the reflection of financial audit risks. Findings from the study reveal that the coefficient reflecting the impact of a CPA’s practice experience on audit quality control is 0.249. Additionally, it was observed that a 1% deterioration in the financial condition of an audited entity correlates with a 0.505% decrease in audit quality. For high-risk clients classified under ‘Special Treatment’ (ST), the range of practice years for CPAs is predominantly between 6 to 14 years, which may not fully meet the clients’ auditing needs. The study suggests that tailored audit surveys should be conducted for various client types prior to audit engagements. This strategic approach would enable better allocation of CPA resources, thereby enhancing audit quality control and the capability to mitigate financial audit risks.

Factors Affecting Audit Quality: Evidence from Jordan

Objective - This study explores the factors influencing audit quality in Jordan, focusing on professional competence, auditor qualifications, availability and independence, professional experience, awareness of audit importance, and audit fees. Methodology/Technique –. Drawing from a sample of 454 Jordanian legal auditors, the research employs a questionnaire-based methodology. Findings - Results indicate a significant impact of the studied factors on audit quality, with audit fees being the most influential, followed by auditor objectivity and independence. Professional competence, academic qualifications, professional experience, and awareness of the importance of audits also contribute to audit quality. These findings underscore the importance of fair fee structures, maintaining auditor independence, and emphasizing professional competence to enhance audit quality and public trust. Novelty - The study recommends setting fees aligned with task complexity and upholding auditor independence for meaningful audit opinions. Type of Paper: Empirical JEL Classification: M41, M42, M48 Keywords: Audit Quality, Professionalism, Availability, Professional Experience, Audit Fees. Reference to this paper should be referred to as follows: Aburisheh, K; Nofal, S. (2023). Factors Affecting Audit Quality: Evidence from Jordan, Acc. Fin. Review, 8(3), 54 – 63. https://doi.org/10.35609/afr.2023.8.3(1)

Factors Affecting Audit Quality In Internal Auditors

Purpose: This study aims to analyze the influence of competence, independence, objectivity, ethical sensitivity, and experience of auditors on the quality of audit results at the Tulungagung Regency Inspectorate. Methodology/approach: This research uses a quantitative methods using questionnaires distributed to auditors and P2UPD at the Tulungagung Regency Inspectorate. Data were analysed using a statistical application SmartPLS 3. Findings: The results show, that independence, ethical sensitivity, and auditor experience significantly affect the quality of audit results. Meanwhile, competence and objectivity do not significantly affect the quality of audit results. Practical and Theoretical contribution/Originality: Currently, the Tulungagung Regency Inspectorate was asked to conduct a re-audit because it was known that the results of previous audits differed from field data or facts obtained by the Tulungagung District Attorney team. Research Limitation: This study was only conducted at the Tulungagung Regency Inspectorate. So that the respondents were limited to 33 examining staff or auditors and P2UPD in the Tulungagung Regency Inspectorate

Factors Affecting Audit Quality: Evidence from Jordan

This study aims to recognize the factors that affecting the quality of audit from the perception of external auditors in Jordan, namely (professional competence and auditor qualification, auditor availability and independence, auditor professional experience, auditor aware of the importance of audit quality, audit fees), by analyzing the study variables and showing their impact on the audit quality and making recommendations on raising the level of performance of the profession. To achieve the objectives of the study and test its hypotheses a questionnaire will be designed after reference to previous studies, International Auditing Standards, and legal accounting regulatory Law No. 73 of 2003. Keywords: audit quality, professionalism, availability, professional experience, audit fees.

Research on the Relationship between Internal Audit Externalization, Executive Power and Audit Quality

Audit quality is divided into internal audit quality and external audit quality, and the independence of the former has always been weaker than that of the latter. By selecting the two variables of internal audit outsourcing and executive power, combined with the method of empirical research, we compared the above two variables with audit quality. We will study the relationship between them and explore measures to strengthen audit independence from two perspectives, ultimately achieving the effect of improving audit quality. Based on the collation of domestic and foreign literature on factors affecting audit quality, this paper studies the relationship between internal audit outsourcing, executive power and audit quality, defines the concepts respectively, and determines the theoretical basis required for the research. From three Starting from the relationship between variables, a total of three hypotheses were put forward. An investigation was conducted using A-share listed companies in the Shanghai Securities Market from 2014 to 2018 as a research sample. Based on previous research, appropriate methods were selected to quantify the three variables and establish a model. Through empirical analysis, all three hypotheses have been verified. The first conclusion is that executive power is negatively related to corporate internal audit quality, that is, the greater the executive power, the lower the audit quality. The second conclusion is that internal audit outsourcing is positively related to audit quality, that is, the more reasonable the allocation of internal audit outsourcing services, the higher the audit quality. The third conclusion is that internal audit outsourcing will inhibit the negative relationship between executive power and audit quality.

The Factors Affecting Audit Quality with Auditor’s Experience as Moderating Variable

The purpose of this study was to examine and analyze about the effect of independence, due professional care, locus of control and time budget pressure on audit quality with auditor’s experience as moderating variable at Regional Inspectorate of The Pati Residency. This study used convenience sampling technique with sample of 100 respondents from internal auditors. The analysis used Smart PLS 4.0 Software and the result: (1) Independence had positive effect on audit quality. (2) Due professional care had positive effect on audit quality. (3) Locus of control had positive effect on audit quality. (4) Time budget pressure had no effect on audit quality. (5) Auditor’s experience not able to moderate the effect of independence on audit quality. (6) Auditor’s experience not able to moderate the effect of due professional care on audit quality. (7) Auditor’s experience is able to moderate (strengthens) the effect of locus of control on audit quality. (8) Auditor’s experience not able to moderate the effect of time budget pressure on audit quality

Disclosure of Key Audit Matters: European Listed Companies’ Evidence on Related Parties Transactions

The growing expenses, dependence on IT for business operations, and growing requirements regarding related party transaction (RPT) reporting impose the need for increased attention to this area. The paper’s objective is to examine the nature of RPTs, identified by auditors as a key audit matter (KAMs), challenges and solutions to problems related to risk management, and the detection of factors affecting audit quality. The research methodology is qualitative, with an analysis of the level of disclosure of KAMs reported by auditors from the Related Parties category, grouped by type of auditors, their opinion, year, country, and fields of activity. Data were collected from the Audit Analytics database and filtered by category KAM: Related parties, period 2013–2021. The selection resulted in 111 companies reporting 248 KAMs related to RPTs, from which most were reported in 2017–2019. Of these, nearly two-thirds were reported by auditors from the Big4 category. Most KAMs were reported by companies in the U.K., Germany, and France, and the industries with the most KAMs were finance, insurance, and real estate. In conclusion, there are factors that can affect audit quality due to the reporting of RPTs, but by identifying them, the audit process can be better managed, thus increasing its efficiency.

Electronic Audit (E-Audit), Audit Judgement, Corruption Detection and Audit Quality: BPK RI

Research aims: This research is based on the phenomenon that occurred related to the existence of several limitations faced by the Supreme Audit Agency of the Republic of Indonesia in carrying out audits of financial statements in public sector entities. This condition risks affecting audit quality, resulting in the emergence of information gaps between BPK RI, the public and related stakeholders. The purpose of this study was to examine and analyze whether the effect of each independent variable (X1, X2 and X3), including electronic audit (e-audit), audit judgment and the detection of corruption affecting audit quality as the dependent variable (Y ).
 Design/Methodology/Approach: The research method used is a quantitative method. This study examines the effect of e-audit, audit judgment and corruption detection on audit quality. This study uses primary and secondary data with a research instrument in the form of a questionnaire. The object of this study is the IB Auditorate as a work unit equivalent to echelon II under the Main Auditorate of State Finance I at the Head Office of the Supreme Audit Agency of the Republic of Indonesia. The number of respondents in this study were 40 auditors/examiners in the IB Auditorate. The type of analysis in this study was statistical descriptive analysis. The statistical analysis tools used are the SPSS and Eviews applications.
 Research findings: The results of the empirical study revealed that each of the independent variables (X1, X2, and X3), including e-audit, audit judgment and detection of corruption, had a positive and significant effect on audit quality as the dependent variable (Y).
 Theoretical contribution/Originality: Future research is needed to develop with other indicators besides the quality of electronic audit (e-audit), audit judgement, corruption detection and audit quality.

The Existence of an Audit Committee as a Moderation Among Factors Affecting Audit Quality

Fraud often occurs in manufacturing companies and always experiences changes every year, one of which is financial statement fraud. The existence of financial statement fraud, especially that which occurred in these manufacturing companies, has made public confidence in the reliability of a financial report produced by a Public Accounting Firm (KAP) decreased. This study aims to determine the effect of audit fees. Audit tenure and audit rotation on audit quality as well as to find out how the audit committee is related as a moderating variable to the relationship between the independent variables and the dependent variable. The research method used is descriptive verification using secondary data in the form of financial reports and annual reports of manufacturing companies from the Indonesian Stock Exchange website so that the population is manufacturing companies listed on the Indonesian Stock Exchange with a total sample of 38 companies that have met the sampling criteria. by using purposive sampling method. Methods of data analysis and hypothesis testing the authors use the logistic regression method and Moderated Regression Analysis (MRA) with the support of the SPSS Version 26 program. The results show that there is an effect of audit fees on audit quality, audit tenure and audit rotation have no effect on audit quality. the simultaneous effect of audit fees.

The effect of audit team's emotional intelligence on reduced audit quality behavior in audit firms: Considering the mediating effect of team trust and the moderating effect of knowledge sharing.

Reduced audit quality behavior is widespread in the auditor's practice and is an important factor threatening audit quality. Some prior studies have investigated the relationship between auditors' psychological contract violation and reduced audit quality behavior. However, the research of relationship between emotional intelligence (EI) and auditors' behavior is still in its infancy despite the fact that the auditing profession would benefit greatly from improving audit team's EI. This study examines whether and why the audit team's EI restrains the audit quality reduction behavior in audit firms. In the study, our hypotheses are tested using a data set collected from 326 respondents in Chinese audit firms. The results are as follows: firstly, audit team's EI is directly negatively related to reduced audit quality behavior. Secondly, EI is indirectly related to reduced audit quality behavior, through team trust. The results of structural equation modeling (SEM) indicate a mediation model where team trust is negatively related to reduced audit quality behavior. Thirdly, knowledge sharing is a significant mechanism that moderates the effects of different types of EI on audit quality reduction behavior. In the audit team with high knowledge sharing, the audit team's EI can refrain the audit quality reduction behavior; In the audit team with low knowledge sharing, the audit team's EI has no significant effect on audit quality reduction behavior. This study expands the factors affecting audit quality to the psychological level of audit teams, enriches the literature on audit team's behavior characteristics, and provides direct evidence for the relationship between audit team's psychological characteristics and audit quality.

Factors Affecting Audit Quality with Due Professional Care as Moderating Variable at KAP in Indonesia

The Purposes of this research are to examine the influence of continuing professional education, experience of auditor, number of clients and audit tenure as factors that affect audit quality with due professional care as moderating variables on KAP in Indonesia. The amount of population of this research were 213 Public Accountants. The sampling technique used is purposive sampling and the number of samples is 198 Public Accountants. This research used logistic regression model with cross section data using the Eviews 12 application. The results of the research: Continuing professional education, Experience of auditor, number of clients except audit tenure partially and simultaneously have influanced audit quality. Audit tenure partially have no influance on audit quality. Due professional care as a moderating variable cannot moderate the influence of continuing professional education, Experience of auditor, number of clients and audit tenure on audit quality.

Factors Affecting Audit Quality with Due Professional Care as Moderating Variable at KAP in Indonesia

Factors Affecting Audit Quality with Due Professional Care as Moderating Variable at KAP in Indonesia

Analysis of External Factors Affecting Audit Quality in Indonesia

This study aims to analyze the effect of audit tenure, auditor reputation and KAP rotation on audit quality, either partially or simultaneously in Indonesian companies, namely manufacturing the basic and chemical industrial sectors listed on the IDX for the 2015-2019 period. The method used is a quantitative method, where the population in the study is to take a total of Indonesian companies, especially manufacturing companies in the basic and chemical industrial sector in Indonesia from the 2015-2019 period, which is as many as 76 companies. Samples taken from the population are those that meet the predetermined criteria, so that only 43 companies are used as samples for this study. The data used for this study were 215 (43 companies x 5 years of financial reporting period). The results of the study explain a) Audit tenure has no significant effect on audit quality, where the audit engagement period is not a problem for quality audits, b) auditor reputation does not significantly affect audit quality in Indonesian companies. This proves that the size of the KAP does not affect the quality of the audit provided, so that the public accounting profession maintains public trust, c) KAP rotation has a significant influence on audit quality in Indonesian companies so that auditors must pay attention to KAP rotation which is regulated by regulations, d) audit tenure, auditor reputation and KAP rotation together have no significant effect on audit quality in Indonesian companies. This is generally regulated by regulations, so it is only necessary to supervise the established procedures so that audit quality can be presented properly and fairly.

Moderating Effect of Motivation on factors affecting Audit Quality

This study aims to evaluate the effect of auditor competence, auditor experience, and remote audit on audit quality with motivation as a moderating variable in the Internal Audit Unit of PT. TASPEN (Persero) Jakarta. The population and sample in this study were 30 respondents, spread over the Internal Control Unit of PT TASPEN (Persero) in Jakarta, and the Internal Control Unit in the regions such as SPIDA Bandung, SPIDA Jakarta, SPIDA Makassar, SPIDA Medan, SPIDA Semarang. The data is processed by PLS Algorithm analysis with the help of Smart PLS 3.0. Based on the results of this study, it shows that the experience of auditors has a positive effect on audit quality, remote audit has a positive effect on audit quality, and competence has no effect on audit quality of the Internal Audit Unit of PT. TASPEN (Persero) Jakarta. Meanwhile, motivation as a moderating variable, unable to moderate the relationship between auditor competence and audit quality, unable to moderate the relationship between auditor experience and audit quality, and unable to moderate the relationship between remote audit on audit quality.

BPK RI Audit Quality in Ethical Perspective

Abstract: Purpose: The purpose of this study is to see the influence of an ethical perspective of an audit quality. Research Methodology: This study uses a descriptive analysis method by collecting the results of previous studies that are relevant to the factors that affect audit quality in an ethical perspective. The data collection begins by looking for literature on previous research related to the Effect of Ethics on BPK RI's Audit Quality with the keywords Factors Affecting Audit Quality and Professional Ethics. The literature search process uses Google Schoolar and Publish or Perish. Result: The findings obtained from the articles obtained indicate that there is a relationship between ethical perspective and audit quality. Limitations: This study has limitations in terms of the scope of research that only focuses on individual ethics. The scope of ethics is very broad and is not only influenced by things that come from the individual, but can also be influenced by environmental factors and other things. Contribution: This study can provide benefits regarding how important individual ethical factors are to produce audit quality. Keywords: 1. Agency Theory 2. Attitude and Behavior Theory 3. Audit Quality 4. Professional Ethics