This study aims to determine the application of audit practicum in assessing the reliability of Accounting Information Systems and identifying audit risks that may arise. The method is through a literature review and analysis of the results of audit practicum activities, with data sourced from audit textbooks, scientific journals, and literature. The results of the discussion indicate that the systematic application of audit procedures, including system understanding, internal control evaluation, compliance testing, substantive testing, and audit risk assessment, plays an important role in assessing the level of reliability of Accounting Information Systems. Based on the results of the evaluation, it can be concluded that the reliability of Accounting Information Systems is greatly influenced by the effectiveness of internal controls and the level of compliance with established procedures, and audit practicum can improve students' understanding of the actual audit process

Weak or non-transparent ESG reports regarding governance structure and internal control policies can signal to auditors a high inherent risk of control failure, which in turn increases the risk of material misstatement due to fraud. This study aims to examine the effect of Environmental, Social, and Governance (ESG) disclosure on audit quality, as well as the effect of company size and industry complexity as moderating variables in manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the period 2020 to 2024. The research sample was determined using purposive sampling. The study uses a causal associative method with a quantitative approach and panel data regression analysis. The statistical data processing and analysis were carried out using STATA statistical software. The results showed that disclosure of environmental aspects had no effect on audit quality. In contrast, social and governance aspects have a negative effect on audit quality. This finding indicates that the higher the social and governance score of a company, the auditor tends to consider the audit risk lower, thus reducing the need for additional independent audits. Simultaneously, social and governance are also proven to reduce audit quality. Firm size is not shown to moderate the relationship between ESG and audit quality, as both large and small firms may experience an exaggerated perception of high ESG reputation. However, industry complexity is shown to positively moderate the relationship between social and governance aspects and audit quality. In complex industries, despite high ESG scores, the demand for rigorous audit oversight still increases due to the high potential reporting risks. This study provides an empirical contribution in understanding the dynamics of ESG influence on audit in Indonesia's manufacturing sector, and suggests the importance of considering operational complexity factors in designing an effective audit oversight system.

ABSTRACT This paper examines how audit market regulation affects audit quality. To establish a causal relationship, we utilize the implementation of the filing system under the New Securities Law as a quasi-natural experiment. The results show that the implementation of the filing system has significantly improved audit quality, indicating that the reform has promoted healthy competition in China’s audit market. After controlling for endogeneity and testing robustness, we find that the results remain valid. The mechanism test finds that introducing the filing system under the New Securities Law reshapes auditors’ incentives, making them more cautious about audit risk and increasing their effort to avoid losses, thereby improving audit quality. Furthermore, the greater the policy shock perceived by an audit firm, the stronger its effect on improving audit quality. In addition, the increase in audit quality is concentrated in companies with less complex business, those with decentralized ownership structure and those with weak external governance. In terms of regional characteristics, we find the impact is greater for firms located in regions characterized by a more favorable business environment and stronger legal institutions. Collectively, we provide novel evidence of how this audit market regulatory reform impacts audit quality.

This study aims to obtain empirical evidence regarding the application of professional judgment by auditors in assessing the sufficiency of audit evidence on revenue accounts to prevent the risk of material misstatement. This study uses a qualitative approach with a case study at KAP SS. Data was collected through semi-structured interviews with two auditors. The results of the study indicate that revenue accounts have a high risk of misstatement, thus requiring the application of careful judgment. Auditors consider various factors in determining the sufficiency of evidence, such as materiality level, audit risk, economic conditions, as well as the size and characteristics of transactions. The audit procedures used include substantive testing and control testing with adjustments to procedures based on identified risks. The application of professional judgment is also reinforced through a system of supervision and collaboration among auditors. This study emphasizes that professional judgment plays an important role in making appropriate audit decisions, maintaining the integrity of financial statements, and ensuring that the evidence obtained is sufficient, relevant, and reliable in supporting the auditor's opinion.

The study explores the role of internal audit attributes and standards in promoting the quality of financial statements within companies based in Sulaymaniyah Governorate. It focuses on evaluating internal auditors’ characteristics, performance, strengths and weaknesses, adherence to modern auditing standards, and their role in mitigating audit risks, financial manipulation, and accounting errors. The study also highlights the importance of companies’ reliance on internal auditing to improve the quality of financial information and statements while protecting the rights of investors, owners, and stakeholders. The research sample included company managers, department heads, accountants, auditors, and administrators. Questionnaires were distributed to five companies, yielding 65 valid responses, and data were analyzed using SPSS and Microsoft Excel. The research indicates that improving financial statement quality is closely linked to auditors’ competence and compliance with professional standards, which enhances reliability and error prevention. The study recommends strengthening auditors’ independence and impartiality, applying modern auditing techniques, and considering their recommendations to ensure accurate and fair financial reporting.

The use of financial derivatives to hedge economic risks presents several operational and financial reporting challenges to corporations. Special hedge accounting treatment is stringent and complex; different accounting treatments may be used for similar instruments, and risk management strategies, expertise, and judgment are necessary in valuing certain instruments; and careful monitoring and internal controls processes and procedures are necessary to ensure that risks are properly hedged. This study examines whether the use and the extent of the use of financial derivatives are associated with audit risk, financial restatements, and internal control weaknesses. Using a sample of over 6000 firms across non-financial industries from 2012 to 2022, I find that derivative use is associated with an increase in audit fees, restatements, and internal control weaknesses. The fair value of total derivatives used is associated with an increase in audit fees and internal control weaknesses. These findings provide evidence on the hidden costs of derivatives; the auditor’s price increased audit risk in audit fees, and the additional resources needed to support derivative hedges expose firms to additional financial reporting and internal control risks.

This article investigates the transformation of auditing practices under the influence of growing economic interdependence, global instability, and geopolitical tensions characteristic of the 21st century. As international supply chains become more integrated and financial systems increasingly interconnected, auditors face new and complex risks that challenge traditional audit methodologies. The study highlights how military conflicts, international sanctions, restricted access to information, and the destruction or loss of assets significantly affect the reliability of financial reporting and the professional judgment of auditors. A special focus is placed on the consequences of military aggression, particularly the full-scale invasion of Ukraine in 2022, which caused unprecedented disruption to the operations of enterprises and public institutions. The authors identify new categories of audit risk that have intensified under wartime conditions: the loss or inaccessibility of primary documentation, forced relocation of enterprises, limitations in conducting inventory procedures, impairment of assets, and heightened risks of fraud due to weakened internal controls. Another crucial aspect addressed is the threat to auditor independence, especially in environments with political pressure, sanctions, and high economic uncertainty. The analysis draws on the International Code of Ethics for Professional Accountants (IESBA), emphasizing the relevance of intimidation threats, conflicts of interest, and economic dependence on clients. The article combines theoretical frameworks with real-world case studies from both Ukrainian and international practice. Examples include audit challenges faced by large Ukrainian state enterprises such as Ukrzaliznytsia and Energoatom, as well as the withdrawal of Big Four audit firms from the Russian market due to political and ethical considerations. These cases demonstrate how geopolitical factors redefine not only audit techniques but also the ethical responsibilities of auditors. The authors propose a range of measures to adapt auditing to modern challenges: the use of alternative audit procedures, enhanced analytical methods, implementation of digital tools, strengthening of ethical safeguards, and integration of geopolitical risk assessment into audit planning. The findings underscore that the auditing profession must evolve rapidly to maintain trust, transparency, and accountability in an increasingly volatile global environment.

This study investigates how CEO reputation influences firms’ audit fees. Using prestigious business awards to measure positive shocks to CEO reputation, empirical evidence reveals that firms with nationally recognized CEOs exhibit significant reductions in external auditing fees compared to peer firms. The results hold for various robustness checks. Moreover, we find more pronounced negative relations between CEO reputation and audit fees for firms with weaker internal governance, CEOs who win more prestigious awards, firms with highly paid CEOs, and firms with greater analyst followings. Finally, we find that CEO reputation affects client risk proxied by return volatility, accounting quality, and internal control weakness, which in turn influences audit fees. Collectively, our results show that CEO reputation affects audit risk and pricing.

Purpose The aim of this study is to empirically examine the effect of corporate social responsibility disclosure (CSRD) and environmental disclosure (ED) on audit fees. It also examines the role of Oman Vision 2040 (OV 2040) disclosure in moderating the relationship between CSRD, ED and audit fees. Design/methodology/approach The study sample consists of 280 firm-year observations, data were collected from Muscat Borsa and Refinitive Eickon database for five years: 2019–2023. The study tests two models of the association between CSRD, ED and audit fees; Model 1 tests this association in the absence of the moderating variable, while Model 2 tests the association in the presence of the moderating variable. Multiple statistical techniques are used to examine the relationships between the variables and validate the results. Findings The study documents that high CSRD and ED are significantly and positively associated with audit fees. More importantly, OV 2040 plays a moderating role in the association between CSRD, ED and audit fees suggesting that this vision is important for auditors in their audit risk assessment practices. The findings support the argument that socially responsible companies that develop their strategic plan considering OV 2040 should be rewarded with a reduction in their audit fees. The study conducted dynamic analysis which show that these results are valid over time. Originality/value The findings provide support for the argument that socially responsible companies that are building their strategic plan considering OV 2040 should be rewarded with a reduction in their audit fees.

Purpose This study aims to examine the impact of mandatory corporate social responsibility (CSR) regulations on audit fees, using Section 135 of India’s Companies Act, 2013, as a quasi-natural experiment. The regulation mandates firms exceeding specific financial thresholds to allocate 2% of their net profits to CSR. Unlike voluntary CSR, which often signals strong governance, mandatory CSR imposes compliance obligations that may increase audit complexity, risk and costs. While prior research has focused on voluntary CSR’s impact on audit fees, this study explores how mandatory CSR influences firm level outcomes, offering insights into the distinct effects of regulatory compliance on audit practices. Design/methodology/approach The study uses a quasi-natural experimental design, using difference-in-differences (DiD), instrumental variable (IV) and regression discontinuity (RD) methodologies to analyze the impact of Section 135. Firms subject to the regulation were compared to unaffected firms, while accounting for prior CSR engagement. The analysis identifies audit fee changes attributable to mandatory CSR, distinguishing them from voluntary CSR effects. Robustness checks ensure reliability of the results across various methodological frameworks. Findings Mandatory CSR significantly increased audit fees for newly compliant firms due to heightened compliance and agency costs. Firms already engaged in voluntary CSR before the regulation showed no significant fee changes, underscoring the regulatory driven nature of the audit fee premium. These findings highlight that mandatory CSR imposes external obligations that increase audit complexity, unlike voluntary CSR, which signals governance strength and reduces audit risk. The study offers valuable insights for policymakers and auditors navigating the compliance challenges of CSR mandates. Research limitations/implications This study focuses on India’s Section 135 CSR mandate, making it a single country case study. While this provides a unique regulatory context to examine mandatory CSR, it limits the generalizability of findings to other institutional settings. In addition, the study centers specifically on audit fees, leaving other firm-level outcomes unexplored. Future research should investigate broader consequences of CSR mandates, such as their impact on operational efficiency and stakeholder relationships. Social implications This research highlights the social implications of mandatory CSR regulations, emphasizing their role in promoting corporate accountability and societal welfare. By identifying the compliance costs associated with mandatory CSR, such as increased audit fees, the study underscores the need for balanced regulations that achieve social goals without imposing excessive burdens on firms. It also raises awareness of the challenges faced by newly compliant firms, encouraging policymakers to support smoother transitions. The findings contribute to understanding how regulatory mandates can shape corporate behavior, fostering a more sustainable and socially responsible business environment. Originality/value This research provides original insights into the under explored area of mandatory CSR and its implications for audit fees. While prior studies primarily focus on voluntary CSR and its signaling effects on governance and risk, this study highlights the distinct compliance driven costs of mandatory CSR. By leveraging India’s Section 135 CSR mandate as a quasi-natural experiment, the research identifies significant audit fee premiums for newly compliant firms, offering a nuanced understanding of regulatory impacts. The study contributes to both stakeholder and agency theory, providing valuable implications for policymakers, auditors and firms navigating the challenges of CSR regulations.

This study aims to examine the implementation of audit procedures on accounts payable at PT XYZ by KAP Ramli & Rekan, with a focus on compliance with Auditing Standards and effectiveness in detecting material misstatements. Accounts payable are a key component of financial statements representing the company’s obligations to suppliers, requiring accurate presentation for assessing liquidity and capital structure. The study applies a descriptive qualitative method, collecting primary data through interviews with audit staff at KAP Ramli & Rekan and secondary data from relevant literature. The findings show that the audit procedures comply with professional standards, covering comprehensive stages including engagement acceptance, audit planning, risk and materiality assessment, and substantive testing. The planning process incorporates the COSO framework for evaluating internal control, establishes audit objectives based on the five management assertions, and utilizes ATLAS software and Microsoft Excel. KAP Ramli & Rekan apply control testing and substantive procedures, including external confirmations, inspection of supporting documents, review of aging payables, and subsequent payment testing. Risk assessment indicates low inherent and control risks, while detection risk is mitigated through substantive procedures. Overall Materiality is set at 60% of revenue and profit before tax, Performance Materiality at 3% of Overall Materiality, and Threshold Materiality at 3% of Performance Materiality. The study concludes that the audit procedures implemented by KAP Ramli & Rekan align with applicable Auditing Standards and are effective in addressing audit risks related to accounts payable. The implications highlight the importance of enhancing audit quality practices, particularly the effectiveness of planning and internal control evaluation in accounts payable audits.

Accounting is undergoing a radical transformation due to the integration of traditional information systems with blockchain technology and artificial intelligence. Openness, automation, and smart decision-making will all become a reality via this connection. However, traditional SAIS are typically centralized and do not inherently include blockchain or AI. In this study, Smart Accounting Information System (SAIS) technologies are redefined through the integration of these technologies to enhance transparency, automation, and real-time assurance. Blockchain technology's immutability, traceability, and AI's ability to recognize abnormalities and predict provide a more intelligent and secure auditing process. Conventional accounting methods have several issues, including delayed audits, lack of transparency, fraud, and human mistakes. Existing systems fail to provide intelligent anomaly detection and real-time transaction traceability. Financial reporting and audits need immutable records and proactive analytics. There is an urgent need for a single framework to ensure this requirement and its quick implementation. This study proposes the collaborative blockchain-AI audit trails method (CBAATM) for Smart Accounting Information Systems. This is done due to the difficulties mentioned. AI-powered modules utilize fuzzy inference to dynamically analyze audit risks and Random Forest classifiers to detect real-time fraud. This research project utilizes zero-knowledge proofs and homomorphic encryption to simultaneously handle data aggregation, privacy, and independent audits. Using middleware application programming interfaces makes integration with ERP and AIS systems easy. Throughout the testing process, the model outperforms conventional audits. The methodology, according to statistical research, ensures the detection accuracy ratio of 95%, integrity of the blockchain 99.2% of the time, identifies abnormalities 94.1% of the time, satisfies compliance standards 95.4% of the time, and reduces audit latency by 41.5% compared to other existing models.

This study aims to determine the effect of managerial ownership, financial distress, and risk audit on audit report lag (an empirical study of manufacturing companies listed on the Indonesia Stock Exchange) for the period 2022-2023. This study uses a quantitative approach with secondary data. The techniques used in this study are t-test analysis and multiple regression analysis. The research sample consisted of 28 companies listed on the Indonesia Stock Exchange (IDX) selected using purposive sampling based on predetermined criteria. The data analysis used SPSS version 26.0 for Windows. The results of this study indicate that: (1) managerial ownership affects audit report lag; (2) financial distress affects audit report lag; (3) audit risk does not affect audit report lag. Recommendations from this study include that future researchers should add other variables that may affect audit report lag, such as company operational complexity, auditor industry specialization, or audit committee size, and so on.

The Impact of Cybersecurity Incidents on the Preliminary Assessment of the Audit Risk Components (An Empirical Study)

In this paper, we explore how auditors adjust their audit efforts based on the extent and sentiment of client media coverage. While existing literature indicates that firms subject to greater media coverage, particularly of a negative tone, tend to incur higher audit fees, the underlying mechanisms driving this association remain unclear. Leveraging data on audit hours from Korea, we show that media attention prompts auditors to devote more time to audits, particularly by deploying higher‐ranked personnel such as partners and senior‐level staff. This increase in labour input leads to a rise in total audit fees. Notably, our findings indicate that auditors do not modify the fee rate per hour (i.e., fee premiums) based on media coverage or tone. In addition, the results of the path analysis indicate that extensive or negative media coverage leads auditors to increase their audit efforts, which subsequently raises overall audit fees. Further analyses show that quality reviewers and specialists engaged by the auditor allocate more effort to clients when their clients receive substantial and negatively framed media attention. Additionally, Big 4 audit firms appear especially responsive to media attention, particularly in the case of large clients. These results remain consistent across multiple empirical tests addressing potential endogeneity concerns. Taken together, our evidence suggests that auditors interpret media coverage and negative tone as a signal of heightened audit risk and respond accordingly by intensifying effort and assigning more experienced personnel.

The increasing complexity of banking operations and the surge of financial technologies have elevated audit risks and challenged conventional assurance practices. Traditional audit approaches based on sampling, retrospective testing, and manual judgment often fail to capture the dynamic risk environments characteristic of modern banking institutions. This paper presents an empirical analysis of predictive risk assessment models across three banking sub-sectors retail, investment, and microfinance. Using simulated data reflecting 300 firm-year observations, the study evaluates how financial, operational, and governance indicators predict audit risk through logistic regression and random forest modeling. Key variables include return on assets (ROA), leverage ratio, liquidity ratio, internal control score, and board independence. Results indicate that predictive analytics can differentiate audit risk profiles among banking types, with investment banks exhibiting the highest sensitivity to leverage and internal control weaknesses. Predictive models achieved a classification accuracy above 80%, highlighting their value for risk-based audit planning. However, challenges persist regarding data governance, explainability, and regulatory integration. The study concludes that predictive analytics can transform external audit strategy by improving early risk detection, enhancing evidence quality, and aligning with international standards such as ISA 315 (Revised) and PCAOB AS 2110. Future research should focus on integrating unstructured data and developing explainable AI models to strengthen transparency and trust in predictive audit tools.

Purpose This study investigates how family ownership and involvement in management and directorship influenced audit fees in Chinese family firms during the COVID-19 pandemic, leveraging China’s unique cultural and institutional context. Design/methodology/approach Using data from the China Stock Market and Accounting Research Database, the study analysed 18,889 firm-year observations from family-owned listed firms over the 2015–2022 period, employing two-way fixed-effect regressions, robustness tests and controls for endogeneity. Pre- and post-COVID-19 periods (2015–2018 versus 2019–2022) were compared to assess the impact of family governance on audit fees during the pandemic. Findings The results reveal a significant negative relationship between family ownership and audit fees during COVID-19, compared to the insignificant negative pre-crisis association. Family involvement in management consistently reduced audit fees across the whole period, while directorship showed no significant effect. The findings indicate that Confucian-inspired familial alignment mitigated Type I agency problems, reducing audit risk without significantly increasing Type II agency conflicts. Practical implications Family firms can leverage trust-based management to strengthen resilience and reduce external oversight costs, while auditors can optimise procedures for Chinese family firms, reducing costs associated with lower perceived risk. Policymakers could consider tailoring regulations to acknowledge culturally specific governance strengths. Originality/value This study contributes to the audit fee literature by emphasising the moderating influence of Confucian values and China’s cultural and institutional environment. By demonstrating reduced audit fees in Chinese family firms during a global crisis, the study challenges Western-centric agency theory predictions.

This paper discusses the audit risks faced by T Company during its initial public offering (IPO) on the STAR Market. As an important segment of China's capital market, the STAR Market plays a crucial role in supporting innovative technology enterprises. Therefore, the management and control of IPO audit risks are of great significance. As a representative of listed companies on the STAR Market, the study of T Company's IPO audit risks is of great importance to the healthy development of the entire STAR Market. This paper first analyzes the basic characteristics and formation mechanism of IPO audit risks on the STAR Market, pointing out that audit risks mainly stem from multiple aspects such as the company's own operational risks, internal control deficiencies, and changes in the market environment. Then, taking T Company as an example, it analyzes a series of potential audit risks that may arise. Through in-depth research on T Company, it is found that there are problems in the company's implementation of audits. Therefore, this paper combines the analysis to propose solutions. The first is that the company must strengthen internal management, encourage internal personnel to learn, and ensure the competence and professionalism of the cooperating audit institutions. The second is to pay attention to the company's related-party transactions and significant dependencies to prevent audit risks caused by related-party transactions.

The pharmaceutical manufacturing industry has experienced rapid growth in output value over the past decade, becoming a significant component of the national economy. Despite numerous regulatory policies, many pharmaceutical companies have been penalized by regulatory bodies, with a substantial number of cases involving fraud or financial misstatement in the sales and collection cycle. This paper addresses this issue by examining the case of Company Y to investigate two key questions: the significant risk points in the sales and collection cycle of pharmaceutical manufacturers, and the corresponding audit risk response measures for this cycle within the industry. Current research focusing on the audit of pharmaceutical manufacturing, particularly at the level of the sales and collection cycle, is limited. Therefore, this paper centers on the sales and collection cycle, integrating theory with case study based on the audit risk model. By analyzing risk factors related to both the risk of material misstatement and detection risk in Company Y's sales and collection cycle, it summarizes response measures for audit risks in this business segment of the industry. Through statistical description of penalty cases in the pharmaceutical manufacturing industry and a specific analysis of the Company Y case, this paper aims to provide empirical data and guidance for auditors conducting audits in this area.

With the increasing reliance of the whole society on audit reports in recent years and the growing attention paid to the audit industry, accounting firms should make new progress in the new era. Since the implementation of the new revenue recognition standards for all listed companies in China from January 1st, 2020, there have been many deficiencies in revenue auditing. In 2022, the Chinese Institute of Certified Public Accountants (CICPA) issued the ‘Notice on the Audit of Annual Reports of Listed Companies for 2022,’in which the first item in the listed high-risk audit areas was revenue audit. Based on this background, this paper starts from the audit case of revenue projects of China Merchants Transportation Technology (Chongqing) Co., Ltd. (hereinafter referred to as: CMTT) by Shine Wing Certified Public Accountants. By analyzing the revenue audit process and the deficiencies occurring in the revenue audit of the accounting firm, it puts forward suggestions on how the accounting firm can better promote the audit work, in order to reduce audit risk, improve audit efficiency, and increase the reliability of the audit report. This paper describes the revenue audit process of CMTT and analyzes the shortcomings of the accounting firm in the audit work from various work behaviors. Secondly, guided by the goal of improving audit efficiency, it proposes suggestions for optimizing audit work, perfecting audit procedures, and improving audit quality. This paper discusses the practical application of the revenue audit of CMTT by the accounting firm, providing a reference for similar enterprises.