Audit Quality Research Articles

ASSESSING THE INFLUENCE OF TECHNOLOGICAL TOOLS ON THE QUALITY OF COMPUTER-ASSISTED AUDITS: THE CASE OF MOROCCAN AUDIT FIRMS

The importance of auditing in Morocco lies in its central role in ensuring the reliability of financial information of businesses, fostering investor confidence, and promoting economic development. Concurrently, the adoption of computer-assisted audit in the country reflects the need to stay at the forefront of technology to address the challenges of a constantly evolving economy, thereby enhancing the efficiency and accuracy of audit procedures. This study aims to assess the extent of impact of technology on audit quality within a multidimensional context in Moroccan audit firms, based on a sample of over 300 auditors who are members of the Order of Chartered Accountants of Morocco. Data were analyzed through linear regression and principal component analysis (PCA) using SPSS. The results reveal that, except for the Big Four subsidiaries and major audit firms in Morocco, computer technology is not the most determining factor in terms of influencing audit quality. However, the study highlights a positive trend: audit firms in Morocco are on the path toward digitizing their processes, which could have a significant impact on the profession in the future.

Enhancing Audit Quality: Key Factors and the Role of Rewards in Government Internal Audits at the Financial Audit Agency of North Sumatra

Numerous audit findings identified by the BPK, rather than the inspectorate—tasked with serving as an internal auditor and an early warning system—indicate that the quality of government internal audits remains inadequate. This observation suggests that the internal audit processes within government institutions have yet to achieve an optimal standard. The principal aim of this study is to analyze the influence of internal supervision, audit probity, public accountability, and auditor competence on the quality of government internal audits. Additionally, the study examines the role of rewards as a moderating variable within the context of the BPK RI North Sumatra Representative. The study utilized a saturated sampling technique to select 48 participants, and data collection was conducted via questionnaires. Statistical analysis was performed using the MRA (Multiple Linear Regression Analysis) method with SPSS version 25. The findings from partial statistical tests reveal that neither internal supervision nor audit probity significantly impacts the quality of government internal audits. Conversely, public accountability and auditor competence demonstrate a positive and significant relationship with internal audit quality. When analyzed collectively, internal supervision, audit probity, public accountability, and auditor competence collectively contribute positively to the quality of internal audits. However, rewards do not serve as a moderating factor for the relationships between internal supervision, audit probity, public accountability, and audit quality. In conclusion, this study provides critical insights into the determinants of government internal audit quality. The results underscore the vital role of public accountability and auditor competence in enhancing the effectiveness of internal audits. Nonetheless, greater efforts are required to strengthen internal supervision and audit probity to achieve overall improvements in audit quality.

Accessibility to Primary Health Services and Quality of Life in Patients with Type 2 Diabetes Mellitus in Mountainous Greece

Type 2 diabetes mellitus (T2DM) has a negative impact on the quality of life (QoL) of patients. We evaluated the health status and quality of life (QoL) in relation to accessibility to primary health care (PHC) units among patients with T2DM in mountainous Greece. We analyzed data obtained from 340 patients with diabetes living in the region of Epirus, Greece. The diabetes-specific quality of life was assessed with the Audit of Diabetes-Dependent Quality of Life questionnaire (ADDQoL-19) and the generic health status with the 12-item Short-Form Health Survey (SF-12). Ninety-three percent of the respondents reported that diabetes had a negative impact on their QoL. Lower scores were seen in relation to “leisure activities” (−1.200 ± 1.251) and “freedom to eat” (−1.088 ± 1.058). The mean physical (PCS) and mental (MCS) component scores were 45.6 ± 8.0 and 43.9 ± 8.0, respectively. According to the linear regression analysis, health status was related to the accessibility to the nearest hospital or health care unit, exercise, blood glucose level, and HbA1c level. The QoL was related to the accessibility to the nearest hospital and diet. T2DM has a negative impact on patients’ QoL. Accessibility to PHC units and hospitals as well as the efficient management of patients with diabetes by said PHC units are imperative to control T2DM’s course and improve patients’ generic health status.

Dampak Kualitas Auditor dan Tata Kelola Perusahaan terhadap Kualitas Laporan Keuangan Perusahaan

In Indonesia, efforts to improve corporate financial reporting standards have made corporate governance a top priority. A number of rules issued by capital market regulators, including the Indonesia Stock Exchange (IDX), the Financial Services Authority (OJK), support this, because it ensures the integrity and openness of financial reporting. The purpose of this study is to analyze the impact of auditor quality and corporate governance on the quality of company reports. The research method used was the systematic review method. Syytematic review is a methodology used in literature review, which maps the content of the literature and identifies gaps in the field of study. Sestemtic review using the PRISMA Technique. Based on the results of the review carried out, the impact of auditor quality and corporate governance on the quality of company reports is: 1) producing better quality financial statements; 2) Able to identify major errors in financial statements; 3) Have Compliance with Accounting Regulations and Standards; 4) Periodic reviews.

Pengaruh Kompetensi, Independensi dan Due Professional Care terhadap Kualitas Internal Audit

Based on the results of observations, the background to this research is the fluctuation in the number of employees and internal auditors, as well as fluctuations in the number of case findings discovered by internal audit which are thought to be caused by various factors. This research aims to determine the influence of Competency, Independence and Due Professional Care both partially and simultaneously on the Quality of Internal Audit at Bank BJB Syariah Braga Bandung Head Office. The research objects in this report are employees at Bank BJB Syariah Braga Bandung Head Office. This type of research is quantitative research with an associative approach and the type of data used is primary data processed using the IBM SPSS Statistics 26 application, with data collection techniques in the form of observation, interviews, literature studies and questionnaires. The sampling technique is probability sampling with simple random sampling. The population in this research is all employees at Bank BJB Syariah Braga Bandung Head Office, totaling 384 people with a sample of 80 people. The research results show that Competence, Independence and Due Professional Care partially influence the Quality of Internal Audit at Bank BJB Syariah Braga Bandung Head Office by 70.1%, 53% and 65.9%, and simultaneously influence is 71.1%.

Digital inventory audits: an alternative approach to physical observation in audit evidence gathering

PurposeThis study examines whether digital streaming and observation technologies can serve as an alternative approach for collecting inventory audit evidence, the challenges faced in their adoption and the factors contributing to their non-adoption.Design/methodology/approachThis study adopts a two-stage, mixed-method approach, beginning with pilot study interviews that informed the comprehensive survey with qualitative and quantitative data. Quantitative data were analyzed using descriptive statistics, t-tests and Pearson’s correlation coefficient, while qualitative data were analyzed using qualitative content analysis.FindingsOur findings revealed a positive perspective concerning the effectiveness and reliability of these technologies for inventory audits and the efficiency of internal controls within them, despite challenges such as obtaining a holistic view of the warehouse, observing obsolescence, ensuring inventory completeness and general reliability concerns. Additionally, preferences for physical inventory audits and skepticism about these technologies’ potential to enhance audit quality were identified as factors contributing to their non-adoption.Research limitations/implicationsThese findings have important implications for cost-conscious firms because they reveal that carefully adopting intermediate technologies can enhance the audit process. Our findings are relevant to audit regulators and firms interested in determining whether such technologies enhance audit efficiency and quality. This study highlights the need for updated auditing standards and directives and technologies that meet auditing requirements.Originality/valueThis study contributes to the literature by uncovering whether less advanced technologies can be used as an alternative approach to collect audit evidence. Consequently, the finding adds to the growing body of literature underscoring the potential of technologies, even less sophisticated ones, to enhance the efficiency and effectiveness of audits, despite their challenges. Additionally, it underscores the need for clear regulatory standards, suggests that auditors embrace emerging technologies and acquire relevant skills and offers insights for technology developers on audit firms’ concerns regarding digital technologies.

The Interaction Effect of Female Leadership in Audit Committees on the Relationship Between Audit Quality and Corporate Tax Avoidance

This study examines the moderating role of female audit committee chairs on the relationship between audit quality (measured by audit fees) and corporate tax avoidance. The analysis is based on 165 UK firms between 2011 and 2021 using static panel data regression models and Lewbel’s heteroscedastic identification method to check robustness. The findings highlight the significant role of audit quality in reducing corporate tax avoidance. In addition, the female audit committee chair strengthens the negative relationship between audit quality and tax avoidance. This study has many implications. For corporate governance, it shows the value of female leadership in audit committees, especially in curbing aggressive tax strategies. Firms should increase female representation in key roles, like audit committee chairs, to improve oversight and ethical financial practices. For regulators and policymakers, it supports the case for strengthening gender diversity mandates to improve corporate transparency and accountability. Tax authorities can use the fact that firms with strong audit quality and female-led audit committees are less likely to engage in tax avoidance to focus their audits on companies with weaker governance structures.

Auditing Under Martial Law

Purpose: The article examines the influence of martial law on the economy and social policy and presents the consequences for auditing. Design/Methodology/Approach: A quantitative research strategy was used to study the financing of audit firms at the macro level. A purposive sampling method was applied to select 100 audit firms across 24 regions of Ukraine, representing diverse operational conditions. Data analysis involved statistical techniques to compare expenditures and revenues from 2021 to 2023, highlighting the impact of martial law on financial performance. Research Limitation: Data was obtained on a 25% reduction in the number of audits in 2023 due to economic pressure on the audit sector. Findings: The findings reveal that auditing during martial law in Ukraine underwent significant adaptation to sustain operations amid war-induced disruptions. Audit firms shifted towards digital tools like ACL and IDEA, enabling efficient remote auditing despite restricted site access. Modular systems and flexible schedules mitigated operational challenges such as relocations, delays, and increased risks. Practical Implication: This research benefits the industry by providing insights into practical strategies for maintaining operational continuity, addressing emerging risks, and leveraging technological tools to improve audit quality and efficiency. Social Implication: The analysis emphasised societal benefits, including increased resilience in financial reporting, enhanced data security, and improved accountability mechanisms, which collectively contribute to the country's economic recovery and stability. Originality/ Value: This study's novelty lies in its focus on the unique integration of digital platforms during active hostilities, which provides a model for adapting audit practices in crisis conditions.

The impact of using ChatGPT on internal audit quality: a case study of a subsidiary of an oil group in Morocco

The integration of artificial intelligence (AI) has brought transformative changes across industries, including the field of internal auditing. With AI technologies evolving, internal auditors are exploring innovative tools to enhance audit quality and efficiency. This study investigates the impact of using ChatGPT on the quality of internal audits in a subsidiary of a major oil group in Morocco. To achieve this objective, we analyzed internal audit processes and evaluated how ChatGPT’s AI-driven capabilities influence audit performance. Data was collected from a sample of 23 auditors working within the subsidiary and analyzed using SPSS (linear regression). The results revealed that ChatGPT’s perceived utility was strongly correlated with improvements in internal audit quality, particularly in explaining technical elements and concepts that are outside the auditors’ typical training, thus enhancing the accuracy and depth of their analyses.

Development of Internal Quality Audit Information System with Personal Extreme Programming (PXP) Approach

Internal Quality Audit (IQA) is an important process to ensure the quality of implementation of activities in educational institutions in accordance with established standards. However, the implementation of IQA that is still carried out manually or semi-digitally can hamper the effectiveness, efficiency, and accuracy in data management and reporting of audit results. Therefore, an information system is needed that can support the audit process in a more systematic and integrated manner. This research examines the development of an internal quality audit system using the Personal Extreme Programming (PXP) approach that is carried out iteratively. The purpose of this study was to evaluate the effectiveness and efficiency of the system developed through four iterations, each of which focused on developing key features such as user management, document management, audit process, and assessment. The PXP methodology was applied to provide flexibility in responding to user feedback, with each iteration resulting in rapid improvements and adjustments according to emerging needs. The results showed that the developed system met the audit management objectives with high functionality, ease of use, and improved efficiency at each iteration. In addition, this iterative approach allows the system to be more responsive to changing user needs compared to conventional development methods. Overall, this research supports the use of PXP as an effective methodology in the development of internal quality audit systems, demonstrating that it can produce solutions that are adaptive, efficient, and suited to user needs.

The impact of audit software on quality of audit in Kuwait: Insights from auditors

This research tries to find a relationship between audit quality and audit software, impacted by the latter. In this study, multiple sentiments of audit professionals and finance executives on the relation of audit software and quality of audit in Kuwait are examined where, on the basis of agreed perspectives of professionals, it was found that audit software positively influences audit quality. This particular article tries to extend the previous works and emphasizes on the observation of audit professionals and their perspectives through a well-structured survey and semi-structured interviews. This study is to identify the distinctiveness of the audit industry in Kuwait comparing market size and available inadequate local auditors. The authors try to establish the relationship between audit quality and audit software considering the fact that acceptance of audits software will definitely give a more effective and robust audit process to cover market needs. The paper also considers the auditors’ training and experience as a moderating factor for the adoption and usage of audit software in auditing practices in Kuwait, resulting in useful insights on the effects of the adoption and use of auditing software in enhancing the quality of audit reports as well as suggesting resources for the use of technological developments in auditing practices. Thus, the study contributes to the extant literature on the dynamics for the adoption and usage of computerized systems in auditing practices to improve the quality of audit reports.

The Impact of Emotional Intelligence on Audit Quality through Job Stress: Evidence from Vietnamese Independent Auditors

Introduction: This study was conducted to examine how emotional intelligence can affect audit quality through its impact on job stress. Objectives: The aim of the study is to determine whether higher levels of emotional intelligence can reduce job stress and improve audit quality, taking into account the pressures that auditors face in Vietnam, such as tight deadlines and complex regulatory requirements. Methods: Using quantitative research methods, using a structured survey to collect data from 327 auditors, audit team leaders, audit department heads and directors of 125 independent auditing companies in Vietnam and using the SEM structure model on SPSS and AMOS 20 software to test hypotheses. Results: The results show that all dimensions of emotional intelligence (Assessing one's own emotions, Assessing others' emotions, Using Emotions, and Regulating Emotions) significantly reduce work stress and work stress, which in turn negatively affect audit quality. Conclusions: These findings are significant because they highlight the importance of emotional intelligence training and stress management interventions in improving auditor health and improving audit quality. By addressing work stress, audit firms can ensure better performance and higher audit standards in a fiercely competitive market like Vietnam, where Big4 audit firms account for 70% of the audit market share

Enterprise internal audit data encryption based on blockchain technology.

Internal auditing demands innovative and secure solutions in today's business environment, with increasing competitive pressure and frequent occurrences of risky and illegal behaviours. Blockchain along with secure databases like encryption improves internal audit security through immutability and transparency. Hence integrating blockchain with homomorphic encryption and multi-factor authentication improves privacy and mitigates computational overhead. Recently, blockchain applications for internal audits in the enterprise sector are still emerging. Thus, blockchain technology in auditing provides the benefits of enhanced transparency and immutability in data processing, which can establish new solutions for internal auditing but still lacks encryption techniques. The research proposed a framework called "BlockCryptoAudit" to enhance internal audit processes through cryptographic encryption methods and blockchain technology, ensuring secure and transparent audit operations. The proposed approach integrates an additive homomorphic Paillier encryption scheme with blockchain to create a safe and tamper-resident audit trail. Utilizing homomorphic Paillier encryption, BlockCryptoAudit ensures that computations may be performed on encrypted audit data while safeguarding data privacy. The applied blockchain hyperledger component guarantees the immutability and transparency of encrypted audit records, resulting in a decentralized and tamper-resistant record. By limiting data accessibility to authorized individuals based on specified responsibilities, role-based access restrictions handled using smart contracts further strengthen security. The study protects audit data's security and confidentiality by encrypting it and putting it on a blockchain. The study compares the proposed BlockCryptoAudit with models like B-OAP, BSE-DF, and EG-FLB regarding risk mitigation, audit quality, security overhead, and audit trail effectiveness. With little security overhead, BlockCryptoAudit beats out B-OAP, BSE-DF, and EG-FLB in terms of risk mitigation (98%) and audit quality (99%). It is an effective way to improve internal audit processes and guarantee data integrity due to its high performance.

Too good or not by hiring insider CEO: an analysis preference of investment efficiency from Indonesia

Purpose The term “Insider CEO” refers to actor in the top management at corporate level who has the advantage of having better information regarding a company’s resources to make investment decisions. This study aims to examine the relationship between insider chief executive officers (CEOs) and investment efficiency in emerging economies. Design/methodology/approach The authors comprises sample of nonfinancial companies listed on the Indonesia Stock Exchange during the period of 2011–2021, using an archival approach through regression analysis. Findings This study demonstrates a significant negative relationship between insider CEOs and investment efficiency. In addition, audit quality as the firm audited by BIG4 accounting firm changes the direction of previously negative findings, turning them into significant positive relationships, and audit quality acts as a moderating factor on the insider CEOs and investment efficiency nexus. Furthermore, the authors conducted a series of endogeneity and robustness tests to strengthen the results of this study. Research limitations/implications This study offers new ideas in the investment literature and its practice in companies, where it highlights the role of the existence of an insider CEO in practice on investment efficiency. The authors provide recommendations to companies, potential investors and policymakers regarding the potential for insider CEOs to influence investment returns that tend to be less efficient. Therefore, this study proves that the presence of an insider CEO has a higher risk-taking preference, which has the potential to influence less efficient investment practices. Originality/value Several previous studies have focused more on the role of CEOs who come from outside the company and their impact on investment practices. However, it is not clear whether insider CEOs will influence the company’s investment efficiency practices driven by the perspective of “risk preferences and investment returns”. To the best of the authors’ knowledge, this is the first study to substantiate the role of CEOs based on their origin and their impact on less efficient investment practices.

Professional Skepticism and Financial Statement Fraud Detection among Malaysian and Indonesian Auditors: A Cross-Cultural Analysis

Recent financial scandals highlight flaws in auditor quality, signalling a decline in professional skepticism, particularly in regions like Malaysia and Indonesia with diverse regulatory frameworks, cultures, and environments. This study examines the relationship between six professional skepticism traits and fraud detection by comparing Malaysian and Indonesian auditor utilising a questionnaire based on Hurtt’s 30-item scale to assess auditors’ professional skepticism. A purposive samples of 187 Malaysian auditors (MIA members) and 173 Indonesian auditors (IAPI members) was surveyed. Partial Least Squares Multi-Group Analysis (PLS-MGA) revealed significant differences between the two countries in two key traits: interpersonal understanding and suspension of judgment which weakened (improve) Malaysian (Indonesian) auditors’ ability to detect fraud respectively. Indonesian auditors, on the other hand, may benefit from developing these traits to enhance fraud detection. The variance in skepticism traits is attributed to differences in professional environments, with Malaysian auditors primarily from Big 4 firms, while Indonesian auditors are predominantly from non-Big 4 firms. Targeted training for Indonesian auditors, focusing on interpersonal understanding and suspension of judgment, could enhance their fraud detection capabilities. This study contributes to the literature by identifying cultural and professional differences as key factors affecting skepticism, providing a basis for strategies to improve auditing practices in Indonesia.

The Impact of The Government Financial Information Management System in Improving The Quality of Internal Auditing in Government Departments: A Case Study of The Maternity and Children’s Hospital In Buraydah

The Impact of The Government Financial Information Management System in Improving The Quality of Internal Auditing in Government Departments: A Case Study of The Maternity and Children’s Hospital In Buraydah

Air Quality and Stock Price Crash Risk: From the Perspective of Audit Quality

Air Quality and Stock Price Crash Risk: From the Perspective of Audit Quality

Does age similarity between audit committee chair and engagement partner affect audit quality?

Does age similarity between audit committee chair and engagement partner affect audit quality?

Determine the Factors Affecting the Quality of Internal Shariah Audits: A Review Paper on Islamic Banking in Libya

Purpose: The present research will offer a theoretical framework discussing the concept of internal Shariah audit quality and identifying the factors that affect it. The study aims to examine these elements and their relationship with the internal Shariah audit quality in Islamic banking in Libya. Design/Methodology/ This study will employ qualitative research methods, gathering data through interviews with employees of Libyan Islamic banks using semi-structured questions, grounded theory, and thematic analysis. This study aims to generate in-depth insights into audit quality and develop a theoretical framework to enhance the quality of internal Shariah audits. Findings: The findings provide a deep understanding of audit quality and contribute to an empirical framework for the quality of internal Shariah audits. The author expects that several factors may influence the quality of an internal Shariah audit, including the auditor's competency, independence, and level of compliance with Shariah standards for Islamic banks and internal audits. Including the Shariah audit report and certain policies relating to Libyan Islamic banks. Despite the crucial significance of internal Shariah audit quality in maintaining a Shariah-compliant environment inside Islamic institutions. Nevertheless, the existing literature is insufficient, and inadequate research has been accomplished in this field. Implications/Originality/Value: The study will produce novel insights and assist researchers in enhancing their understanding of the elements that affect the quality of Shariah audits in Libyan Islamic banks. Furthermore, the results of this study will significantly enhance the management of Islamic banks and regulators by revealing the elements that affect the quality of internal Shariah audit.

Analysis of Integrated Audit Approach in Auditing Sustainable Energy Development Programs in State-Owned Enterprises

This research examines the use of the Integrated Audit Approach in auditing National Program 6, Sustainable Energy Development, on State-Owned Enterprises (SOEs) by AKN VII of the Audit Board of the Republic of Indonesia. Sustainable energy development, focused on renewable energy and energy efficiency, is a key priority in the 2020–2024 Medium-Term National Development Plan. Given SOEs' significant role in implementing this program, auditing their performance and governance is essential to achieving national strategic goals. The Integrated Audit Approach addresses limitations of traditional audits, such as restricted coverage and less strategic recommendations, by combining financial, compliance, and performance audits. This comprehensive method yields more in-depth and sustainable recommendations. The research uses a qualitative, descriptive-exploratory approach, gathering data through interviews with Audit Board auditors and reviews of internal reports and documents. Findings indicate that the integrated audit approach enhances SOEs' audit quality by delivering more strategic and relevant recommendations, particularly in sustainable energy governance. This study aims to advance audit theory and practice within the Audit Board, contributing to improved governance and performance of SOEs.