Audit Report Research Articles

A case study on the calculation of carbon emissions over the entire life cycle of commercial office buildings based on measured data

Against the backdrop of the “dual carbon” strategy, building carbon emissions have been incorporated into the construction review process. Currently, the calculation and accounting of carbon emissions throughout the entire building lifecycle have become a hot and challenging issue in the field of building carbon emissions. Commercial office buildings, due to their large scale, high energy consumption, and significant carbon emission base, have become a key area for energy conservation and carbon reduction in public buildings. According to the building lifecycle carbon emission assessment system, the lifecycle of commercial office buildings can be divided into four stages: production of building materials, construction, operation and maintenance, and dismantling and recycling. This study takes an existing commercial office building in Beijing, China, as a case study, and based on data from energy audit reports, calculates the carbon emissions of each lifecycle stage using national standards and relevant software, and discusses the factors affecting building carbon emissions. At the same time, a comparative analysis of the differences between Chinese and Western national standards is conducted. Ultimately, strategies to reduce building carbon emissions are proposed. This study is of reference value for the precise calculation of carbon emissions throughout the lifecycle of commercial office buildings.

Challenges and Strategies for Strengthening the Link Between Public Audit and Industrial Policy in Ghana

This study explores the integration of public audit within Ghana’s industrial policy framework, focusing on the challenges faced by the Ghana Audit Service (GAS) in influencing policy effectiveness and accountability. Drawing on governance and accountability theory, resource dependence theory, inter-organizational coordination theory, and policy feedback theory, the study examines the institutional, resource-based, and procedural factors that affect GAS’s ability to drive policy improvement. A qualitative document analysis approach was employed, reviewing audit reports, policy documents, and legislative texts from 2013 to 2022. Key findings reveal that limited resources, a lack of standardized performance indicators, inadequate inter-agency coordination, and weak accountability mechanisms hinder GAS’s capacity to impact policy outcomes effectively. To address these challenges, the study proposes strategies to enhance resource allocation for GAS, establish formalized coordination mechanisms, develop clear performance metrics, and implement robust accountability structures. These recommendations aim to create a responsive, transparent governance framework that enables GAS to support evidence-based policy adjustments. This research contributes to the literature on public audit and governance in emerging economies, underscoring the role of integrated audit-policy frameworks in fostering accountable, effective industrial policies.

Moderating Effect of External Monitory Mechanism on The Relationship Between Earnings Management and Profitability of Listed Petroleum Marketing Companies in Nigeria

This study investigates the relationship between earnings management and profitability of listed petroleum marketing companies in Nigeria and the moderating influence of external monitoring methods. Data for the years 2012 to 2022 were taken out of the sampled companies' annual reports. The results from the GMM estimator showed that the discretionary accrual, as well as the interaction between audit firm size and discretionary, have a significant impact on gross profit margin respectively. According to the study's findings, auditors are aware of earnings management, but they are far more concerned about it when their choices result in inflated rather than understated earnings. The likelihood of receiving a qualified audit report was unaffected by the interplay between audit firm size and discretionary accrual. However, this does not imply that auditors are ignorant of earnings management. The report suggests that methods for the quick detection of earnings management techniques be adopted to decrease the negative impact of earnings management on the profitability of listed petroleum marketing enterprises in Nigeria.

FINANCIAL STATEMENTS AUDIT PROFESSION IN SERBIA: IS THERE A GENDER EFFECT?

The aim of this paper is to examine the position of women in the audit profession in Serbia. The research sample of 2,116 audit reports has been analysed from the point of hired audit firms and gender of the auditor that signed the report. The results show that the number of reports produced by male and female auditors is almost equal, with noticeable trends in Big 4 firms favouring female auditor engagements. In addition, the results show that both male and female auditors have almost the same probability of acquiring new clients, with males having a slight advantage overall, and in domestic audit firms. However, this advantage shifts to females in Big 4 firms. Pearson's correlation results show a weak but statistically significant and positive relationship between auditor gender and higher average audit fees, indicating potential perceptions of increased value associated with female auditors.

Audit Report Lag: An Empirical Investigation of the Effects of Audit Tenure, Solvency, and Firm Size

Purpose – Financial reviews are the ultimate end result of the accounting process, serving as a device to speak about financial activities that aid the sustainability of a company. Audit record lag is an essential indicator in assessing the effectiveness and transparency of a company's economic reporting process. This learns about targets to check out and empirically take a look at the impact of audit tenure, solvency, and company measurement on audit report lag. Design/methodology/approach – The lookup makes use of a quantitative method, with statistics from the Indonesia Stock Exchange. The populace in this learn about is manufacturing corporations in the Property Real Estate sub-sector. A pattern of 60 businesses used to be received with a statement length of 5 years, ensuing in a whole of 300 samples. The records have analyzed the usage of Eviews-13 software. Findings – The effects exhibit that audit tenure negatively impacts audit record lag, whilst solvency and association measurement have a high-quality impact on audit file lag. Research limitations/implications –This study is limited by the observation year and the data obtained, as the data was sourced solely from external sources. Keywords: Audit Report Lag, Audit Tenure, Firm Size, Solvency

EFFECTS OF AUDITING ON COMPANY PERFORMANCE AND SUSTAINABLE DEVELOPMENT

The purpose of this study is to adopt a sustainability-focused approach to present the contributions of auditing to company performance and sustainable economic, environmental, social and administrative development. The research created a correlation data analysis study by analyzing the purpose of auditing company performance and sustainability development benefits. The research examined audit frequency, audit quality, sustainability reports and audit reports. In order to evaluate the relationship between company performance and sustainability indicators, documents such as audit reports and sustainability reports of companies were analyzed and the obtained data supported how audit processes work. The general findings of the study are that auditing provides confidence to stakeholders in the field of activity, efficiency in the financial field, transparency in error reduction and sustainable development. This provides not only financial evaluation but also environmental and social interaction as a whole and can help in the formation of future strategies and achievement of goals. In addition, the participation of competent people who are experts in environmental and social structure in their fields in the audit team will produce more efficient results. According to the research, auditing is the most important bridge for business development and sustainable development. Auditing increases not only the performance of the business but also its reputation. Thus, more importance will be given to sustainable development goals and future studies will be contributed. In the proper functioning of this structure within the audit, time management, planning that foresees the appropriateness of the standards used, audit frequency, audit quality and risk determinations will contribute to creating awareness in society about environment, culture and management.

Comparative insights into suicide prevention: a cross-sectional analysis of English local authority audit reports and action plans.

Suicide rates in the UK are rising, highlighting the need for effective local interventions. This study examined whether English local authorities (LAs) have conducted suicide audits, key findings and whether these were used to develop their action plans. This cross-sectional study assessed suicide audits and action plans from 153 LAs, using data collected from Freedom of Information requests, using statistical (Chi-square test) and thematic analysis. Of 153 LAs, 8 did not respond. Of the remaining 145 LAs, 60% conducted audits. Data from 88 suicide audits and 113 action plans were analysed. Males between 45 and 64years old were found to have the highest incidence of suicide; coastal LAs reported significantly higher suicide rates than the national average (P=.009). Locations (60.2%) and methods of suicide (62.5%) were recognized as key factors for intervention. The aim and scope of suicide audits and action plans vary significantly. Identified risk factors were higher in coastal LAs, and support for men remains inadequate. Standardized guidelines could improve the impact and consistency of data collection and assist in the development of robust strategies to tackle suicide prevention initiatives.

Perceiving Auditors’ Tone

The expanded audit reporting model requires auditors to disclose both risks of material misstatements in the risk section and how they address such risks in the response section in key audit matter (KAM) disclosures. Using hand-collected audit report data from the United Kingdom, I investigate whether investors and analysts find the response tone with communicative value. First, I find that the response tone, but not the risk tone, is significantly associated with audit quality (proxied by lower likelihood of future restatements, lower abnormal audit fees, and longer audit report lag). Next, I find that both investors and analysts view the response tone with communicative value. Moreover, the cross-sectional test results reveal that the association between the response tone and investor or analyst reactions is stronger when there is less available firm-specific information, or when auditors are perceived to be more credible. These findings suggest that the response tone conveys auditors’ sentiment regarding the audit quality, enabling financial statement users to assess the value of audits more effectively.

How quickly do auditors resign from engagements: an examination of auditor resignation lag

Purpose This paper aims to examine factors that determine the time lapse between audit report date and resignation date (the resignation lag). As supporting tests, it also studies auditor resignation and client risk portfolio of the resigning auditor. Design/methodology/approach This paper uses a high-profile case in Hong Kong and a logistic regression to study resignation lag, an ordinary least squares regression to examine auditor resignation, and t-tests and chi-square tests to investigate the risk portfolio of clients dropped, retained and taken-up by the auditor. Findings This paper reports that resignation lag is shorter for clients listed on the main board, with a reported loss or high leverage. The results of a reported loss and high leverage indicate that riskier clients are dropped sooner by the auditor. It also finds that more risky clients are dropped by the auditor and less likely taken up by other Big 4 auditors, and dropped clients become riskier after being dropped. In addition, new clients are not more risky than continuing clients but less risky than clients dropped. Research limitations/implications Since client risk could not be measured by a single risk variable, the conclusion of the results depends on the totality of the results of all variables used. Generalisation of the results should be done cautiously due to the small sample size. As the literature lacks a model that explains resignation lag, the results could be different had such a model exists. Originality/value The investigation of resignation lag advances the literature because it is in the interest of auditors to drop more unfavourable engagements sooner. This efficiency issue, absent in prior studies, is important to an understanding of the audit market. In addition, resignation lag could serve as an observable, summary measure of the resigning auditors’ assessment of client risk, and participants in the market could infer the riskiness of dropped clients using resignation lag.

Determination of Audit Report Lag in Transportation Companies on the Indonesia Stock Exchange

Determination of Audit Report Lag in Transportation Companies on the Indonesia Stock Exchange

Managerial Ability and Audit Outcomes

We examine the role of client firms’ managerial ability in audit outcomes, encompassing financial restatements, opinions on internal controls, audit fees, audit effort, and the likelihood of receiving a going-concern opinion. Using a sample of 35,252 firm-year observations of US nonfinancial firms, we find a statistically significant association between managerial ability and audit outcomes. This suggests that firms with high-ability managers experience fewer financial restatements, reduced internal control issues, lower audit fees, shorter audit report lags, and a decreased likelihood of receiving a going-concern opinion. This evidence is robust to various endogeneity tests, including a natural experiment, propensity score matching, and an instrumental variable approach. Moreover, we show that the impact of high-ability managers on audit outcomes is more pronounced for client firms that suffer from weak governance oversight, deal with severe information asymmetry, are far away from auditors, and lack industry-specific auditor expertise, which supports the case for the substitution effects of managerial ability. Overall, our empirical evidence is distinctive and has implications for client firms, auditors, and policymakers.

Determinasi Pengungkapan Key Audit Matters pada Perusahaan Sektor Finansial yang Terdaftar di Bursa Efek Indonesia Tahun 2022 dan 2023

Audit Standard 701 regarding Key Audit Matters (KAM) disclosure will be implemented in 2022. This standard sets additional responsibilities for auditors to present KAM that can increase transparency and communicative value in the independent auditor's report. This study aims to analyze the effect of the public accounting firm type, audit fees, audit committee size, and audit committee meeting frequency on KAM disclosure. The research sample consisted of 83 companies obtained by purposive sampling method from the population of financial companies listed on the Indonesia Stock Exchange in 2022 and 2023. Then, the data was analyzed using multiple linear regression analysis method. The results of the study found that the frequency of audit committee meetings had a significant positive effect, the type of public accounting firm had a significant negative effect while audit fees and audit committee size did not affect KAM disclosure.

The Office of the Auditor General as a “Trusted Partner” of Government: Assessing the CERB and CEWS Audits

AbstractWe explore the Office of the Auditor General (OAG)'s power and relationship with Parliament through the performance audit reports and evidence regarding two major COVID‐19 benefit programs: the Canada Emergency Response Benefit (CERB) and the Canada Emergency Wage Subsidy (CEWS). We found that OAG would rather be seen as a “trusted partner” in governments' performance improvements, than only serving as a watchdog of the government. While the work between OAG and Parliament strengthens formal and political accountability in Canada's parliamentary system, this relationship is not free of tensions or issues.

Audit Quality and CSR Decoupling: An International Perspective

ABSTRACTCSR decoupling practices undermine the legitimacy of corporate social responsibility (CSR) reports, prompting a desire to use legitimacy‐enhancing techniques, like external assurance (BIG4) of CSR reports. Our study uses the international sample of 34 countries from 2006 to 2019, and results indicate that good audit quality (BIG4) can significantly reduce the CSR performance and disclosure gap (CSR decoupling practices). Further, these results still hold even when using the alternate proxies of CSR decoupling (i.e., SUM) and audit quality (i.e., audit fee), and they emerge mainly in unqualified audit reports. Additionally, we use the GMM and PSM regression analysis to control endogeneity concerns, and the results are still consistent. Overall, our findings suggest that BIG4 auditors assure the legitimacy and dependability of their auditees' non‐financial disclosures (CSR disclosure), as evidenced by their stringent auditing practices. Finally, our study's key implications are that companies are prone to a lower level of CSR decoupling when their external auditor is one of the BIG4 auditing firms. Our findings are particularly apparent to scholars, regulatory agencies and corporate practices.

The association between board composition and audit report lag: investigating the role of royal and government directors

PurposeThis paper aims to examine the extent to which political and state representation (royal family and government directors) on the board are associated with audit report lag (ARL) within the specific context of Saudi firms.Design/methodology/approachDrawing on resource dependency theory (RDT), the study offers a novel perspective on how board political connections influence ARL. Based on a large sample of non-financial listed firms, this study comprises 1,700 firm-year observations for the 2008–2018 period. Pooled ordinary least squares regression tests whether there is a relationship between political connections and ARL.FindingsThis paper documents three key findings: (1) the presence of politicians significantly reduces ARL; (2) beyond the mere existence of political connections, the strength of these connections (e.g. the proportion of royal and government directors on boards) also contributes to reducing ARL; and (3) the relationship between political connections and ARL seems to be influenced by industry characteristics. The results remain robust even after addressing endogeneity arising from auditor self-selection bias.Practical implicationsThe findings provide valuable insights into the influence of political connections on audit efficiency. The findings may be applicable to other emerging markets, particularly Gulf Cooperation Council countries and those with similar institutional, cultural and political characteristics. For policymakers and those charged with governance, incorporating royal family members into corporate boards can enhance the timeliness of financial reporting. Furthermore, the study highlights the ceremonial role, which, aside from the substantive monitoring activity, plays a crucial role in reinforcing legitimacy and providing auditors with comfort and reassurance about the reliability of reporting quality.Originality/valueTo the best of the author’s knowledge, this study is the first to examine the extent to which the presence of royal family directors on the board influences ARL, particularly from the perspective of an emerging economy.

Does reporting key audit matters change corporate disclosure strategy: evidence from Chinese audit report reform*

ABSTRACT This study explores how auditors’ reporting of Key Audit Matters (KAMs) affects firms’ disclosure strategies in the Management Discussion and Analysis (MD&A) section. Using machine learning to identify boilerplate content, we find that KAM reporting reduces the use of boilerplate language, particularly in firms with high financial risk, low transparency, and negative investor sentiment. We also show that both the number and type of KAMs influence the extent to which boilerplate language is used. Our findings suggest that management responds to the risk forewarning effect of KAMs by conveying heterogeneous information to investors.

Unintended Effects of Critical Audit Matters: Early Evidence

SUMMARY The PCAOB mandated a substantial change to the auditor report in 2017, requiring audit firms to start disclosing critical audit matters (CAMs). Klevak, Livnat, Pei, and Suslava (2023) examine the market reaction to the first wave of CAMs between July 2019 and May 2020 and find that the extensiveness of the CAM disclosures coincides with greater stock return volatility and analyst dispersion. In addition, companies with more extensive CAMs experience lower returns, implying lower valuations by the market. The evidence suggests that capital market participants perceive companies with more extensive CAM disclosures and more audit procedures to have higher business risk and uncertainty, even though CAMs were intended to provide more clarity about the audit. The findings are useful for regulators to measure the impact of regulation and to design future standards. Auditors and managers may also consider the conclusions of this study when communicating information about CAMs.

Auditing standards reform in 2016 and going-concern audits

ABSTRACT This paper examines the issuance and accuracy of going-concern audit opinions after China’s auditing standards reform in 2016. We find that auditors are more likely to issue a going-concern opinion after the reform and Type II errors (retaining the false) decrease while Type I errors (discarding the true) increase. Further analyses show that the results are related to the change in GCO disclosure location in audit reports resulting from the reform. The new auditing standards strengthen the auditor’s responsibility for going-concern audits and adjust the alternatives of GCO disclosure location in audit reports. In this context, auditors are increasingly willing to communicate less severe going-concern issues in the audit report. Overall, auditors are issuing more going-concern opinions after the auditing standards reform in 2016 and the change in location alternatives affects the accuracy of going-concern opinions.

Analisis Pengaruh Profitabilitas, Solvabilitas, Likuiditas, Ukuran Perusahaan, dan Reputasi Auditor Terhadap Audit Report Lag pada Perusahaan Sektor Properti yang Terdaftar di BEI Periode 2021-2023

This research aims to analyze the influence of profitability, solvency, liquidity, company size and auditor reputation on audit report lag in property sector companies listed on the Indonesia Stock Exchange (BEI) for the 2021-2023 period. Audit report lag is the time lag between the end of the fiscal year and the publication of the audit report, which can affect investor confidence and the effectiveness of the capital market. The research method used is a quantitative approach with multiple regression analysis techniques. The research results show that profitability has a negative and significant influence on audit report lag, which means that the higher the company's profitability, the faster the audit report is issued. Meanwhile, solvency, liquidity, company size and auditor reputation do not have a significant influence on audit report lag. These findings indicate that profitability is the main factor in determining the speed of audit completion, while other factors do not directly influence the delay in publishing the audit report. This research provides implications for companies, auditors and stakeholders to pay more attention to profitability aspects in managing the timeliness of financial reporting.

Pengaruh Kontribusi Pajak Daerah dan Retribusi Daerah Terhadap Belanja Daerah pada Kabupaten atau Kota di Provinsi Jawa Barat

The primary goal of this research is to determine the effect of local tax and retribution percentages on regional spending in West Java Province's districts and cities. The data in this research was analysed quantitatively using Eviews 12 software and multiple linear regression. This research used nine cities and eighteen districts in West Java Province as its population. A total of 135 samples were included in this investigation, using a saturation sampling strategy. This data is derived from secondary sources, namely audit reports on financial accounts from local governments. These reports, which span the fiscal years 2018–2022, are available on the Republic of Indonesia's Supreme Audit Agency's website. The reports provide data on the amount of money that was actually spent. At least in part, this study's results demonstrate that local taxes significantly affect spending at the municipal level. Quite a bit of weight is borne by local punishment on local spending. Municipal levies and taxes have a significant combined effect on district and city budgets in West Java Province.