Quality Of Audit Services Research Articles

항공사 기내서비스 프로세스분석에 근거한 서비스품질 감사시스템개발에 관한 연구

Purpose: In this study, we developed a service quality audit system through analyzing service processes of airlines' cabin service. Methods: Applying the qualitative approach to service processes analysis; 'service blueprint' methodology was developed, providing airlines a blueprint for cabin service and applying the quantitative service quality audit approach called 'walk-through audit', an audit methodology tailored to airline cabin service called PCPA (Passenger Cabin Patrol Audit) was developed. Results: This study tried to apply both the qualitative and the quantitative methodologies to develop service quality audit checklist and tried to develop details to systemize them into a new methodology. Conclusion: This study will be helpful for Airline services improvement by providing 'service quality audit model', so as to find out the problems and share those with the stakeholders.

Perceptions of Audit Service Quality and Auditor Retention

Prior research has argued that perceptions of the breadth and quality of auditor‐sourced services relative to rival audit firms are of paramount importance to client management when making auditor retention decisions. However, the audit quality factors affecting auditor retention are under‐researched. This study examines the association between perceptions of audit service quality and auditor retention in the compulsory audit tendering context of local government in the Australian state of New South Wales. This context overcomes constraints of unlimited tenure and high costs of changing auditors in prior studies of auditor retention in voluntary tendering contexts, and has high retention rates at tender and evidence of council satisfaction with audit quality. We use a questionnaire survey of 48 audit service quality attributes drawn from the audit service quality literature and administered to finance professionals and internal auditors across all New South Wales local councils. We hypothesize a positive association between perceived audit service quality and auditor retention due to council satisfaction with audit quality. We generate factor scores to test the hypothesis in a logistic regression and find evidence that higher‐order audit quality factors of relationship (via the expertise dimension) and service qualities (via the responsiveness to client needs dimension) are associated with auditor retention, and are worthy of attention by audit firms in order to enhance client commitment and their likelihood of being retained as an incumbent auditor.

Evaluating palliative care ward staffing using bed occupancy, patient dependency, staff activity, service quality and cost data

Background: Palliative care staffing has remained unchallenged for decades while service provision has changed markedly, bringing new workforce demands. There is little evidence to inform hospice workforce structures, which strive to deliver the highest-quality holistic care. Aim: The study had three main aims, to: (i) adapt the acuity-quality workforce planning method used extensively in the UK National Health Service (NHS) for use in hospices; (ii) compare hospice and NHS palliative care staffing establishments and their implications; and (iii) create ward staffing benchmarks and formulae for hospice managers. Design: A method adapted from a widely used nursing workforce planning and development (WP&D) study was used to collect data in hospice and palliative care wards. Setting: Twenty-three palliative care and hospice wards, geographically representing England, were studied. Results: A dataset, which profiles and benchmarks hospice and NHS palliative care ward occupancy, patient dependency, staff activity, ward establishments, quality and costs in 23 palliative care and hospice wards has been created. The database reveals large differences between hospice and palliative care wards. For example, hospice wards are better staffed and more expensive to run but staff deliver higher-quality care (measured using an established service quality audit) despite facing heavier workloads. Consequently, staffing multipliers are created to help managers estimate workload-based ward staffing. Conclusions: This dataset provides evidence-based recommendations to inform palliative care nursing workforce modelling, including deciding future nursing workforce size and mix based on rising workloads. The new dataset is suitable for use in UK hospice wards and may be appropriate for future international use.

The market for audit services in Bangladesh

PurposeThe purpose of this paper is to provide a comprehensive analysis of the audit services market in Bangladesh. It explores the trend in audit fees over a period of 14 years and shows that in real terms audit fees have actually been declining although in nominal terms it appears otherwise. The study aims to expand the domain of audit fee literature by determining audit concentration in the market and thereby showing how the market is not dominated by the so‐called Big Four firms. The paper also examines the degree of inside ownership as a possible determinant of audit fees.Design/methodology/approachThe paper employs a multivariate analysis of estimating audit fees against mainly client‐specific attributes. It computes Helfindahl Index to measure audit concentration in the market.FindingsResults from the multivariate analysis show that the degree of inside ownership inversely affects audit fees. Client size and their multinational affiliation have a significant positive effect on audit fees. Firms in the financial sector also tend to pay significantly higher audit fees in Bangladesh. The reported inverse relationship between the audit fee and proportion of inside‐ownership in the auditee firm indicates, per agency theory prediction, that firms with more diverse ownership in Bangladesh pay more in audit fees. However, contrary to the findings in prior empirical studies, audit fee was reported to be significantly negatively related to audit complexity. As the audit complexity measure is revised, the variable ceases to be a significant driver of audit fees. This could be attributable to a methodological flaw in the traditional method of measuring audit fees as the ratio of inventory and receivables to total assets or to increased efficiency achieved by auditors via scale economies while auditing companies owned essentially by the same group of people.Research limitations/implicationsThe main limitation of the paper is that the closing period of the data is 2003, although there is no evidence to believe that the general determinants of audit fees have changed in Bangladesh since 2003.Practical implicationsA decline in real audit fees is a matter of concern for the quality of audit services because it may impede audit firms to invest in talent and other forms of audit technology essential to delivering a high quality audit. It may also have wider implications on the quality of financial reporting in the country.Social implicationsIf the audit fees do not increase keeping pace with general power, the profession would struggle to recruit talented individuals to the auditing profession. This may have longer‐term social implications as it may drive away potential graduates with little or no parental resources to support them to develop an accounting career with substantial dependence on family funds.Originality/valueThe current study is the first to introduce ownership structure based perspective, in a multivariate format, to explain what drives audit fees in a developing country setting. It also is the first to compute audit concentration in a developing country context. This is the first paper to present audit fee trend in real terms, i.e. inflation adjusted, client size adjusted, and so on.

Ownership concentration, political connection and audit fees: Some evidence from Malaysian capital market

The purpose of our study is to examine how share ownership concentration and political connection determine audit fees in Malaysia. These two determinants, ownership concentration and political connection, are very important, especially, in the context of Malaysia where many companies have very high share ownership concentration and are politically connected. We examine 162 companies listed on the Malaysian Stock Exchange and employ cross-sectional regression analysis to determine the relationship between ownership concentration, political connection and audit fees. We observe that highly concentrated share ownership firms are able to influence priorities of the board to focus on the provision of resources rather than monitoring. Our results suggest a negative association between audit fees and politically connected firms. We also find that higher proportion of independent directors on the audit committee of politically connected firms demand auditors to put additional efforts on the politically connected firms which leads to an increment in the audit fee charged. This suggests that regulators should encourage companies to form an effective audit committee for high quality audit services to ensure that firm is able to minimize the risk exposure. The findings of the study are appealing to literature of political connection and audit fees.

The Demand for Non‐Audit Services and Auditor‐Client Relationships: Evidence from Swedish Small and Medium‐Sized Enterprises

The joint provision of audit and non‐audit services by incumbent auditors has been intensively debated in the literature. The basic issue is that, while non‐audit services can impair auditor independence, knowledge spillovers from these services can reduce the audit cost. This is an important trade‐off for small and medium‐sized enterprises (SMEs) that depend on their auditors for non‐audit services. Using data from 322 Swedish SMEs, this study investigates the choice of purchasing non‐audit services from the incumbent auditor and other audit firms. We hypothesize, and find, that the length of the auditor‐client relationship is positively related to the purchase of non‐audit services from incumbent auditors. Also, we find a positive association between perceived quality of audit services and the likelihood of a client purchasing non‐audit services from the auditor. However, unlike studies of publicly traded companies, agency variables do not drive the purchase of non‐audit services by SMEs.

Auditor appointment in compulsory audit tendering

PurposeThe purpose of this paper is to examine what auditor and audit environmental attributes affect auditor appointment decisions in compulsory audit tendering, and whether the attributes affecting appointment of a new auditor (rotation) are consistent with or different from those affecting reappointment of the incumbent (retention).Design/methodology/approachNew South Wales (NSW) local council finance managers were surveyed for importance ratings of 48 attributes. An hypothesis for differential ratings between rotators and retainers was formulated. Confirmatory factor analysis, tests of mean differences and logistic regression were used.FindingsConsistent with the sample's high retention rate, the most important attributes for all respondents related to the quality of previous experience with the incumbent. Consistent with hypothesis, attributes proxying for a quality auditor (technical competence, independence and reputation) were more important for rotators.Research limitations/implicationsThe authors proxied rotation/retention by intention. Given the importance of audit quality attributes in the appointment decision and the high retention rate in compulsory audit tendering, future research could examine the relation between audit service quality attributes and retention.Originality/valueThis is the first study to examine attributes affecting auditor appointment decisions in a mandatory choice setting. NSW local councils provide a unique opportunity to do so as it is one of few jurisdictions in which compulsory audit tendering operates. Compulsory tendering may be implemented if current legislation aimed at improving audit independence and quality through mandatory partner rotation proves infeasible.

Additional Evidence On The Large Audit-Firm Fee Premium As An Indication Of Auditor Quality

<span>Several studies of the U.S. market for audit services have found evidence of a large audit-firm fee premium. This premium has been interpreted as an indication that large audit firms (typically defined as the Big Eight, now the Big Six), considered as a group, receive higher fees than non-Big Eight firms and thus are perceived to provide higher quality audit services. A common interpretation has been that there is a strong relationship between audit firms size and audit quality. That is, the observed Big Eight fee premium has been interpreted as evidence that this group of large auditors, as a whole, is perceive to provide higher quality audits. Using larger samples than previous studies, this paper decomposes the large auditor fee premium into a separate fee premium effect for each auditor. The results suggest that the observed fee premium is attributable to a subset of large auditors, and therefore it is possible that not all of this group of large audit firms are perceived as offering significantly different audit products, at least when differential audit fees and used as a measure of product differentiation. In addition, when observed audit fee premiums are related to other proxies for auditor quality, there is confirming evidence that large accounting firms are not perceived as a homogeneous group with respect to audit quality.</span>

A Comparative Analysis Of Audit Service Supply Using Desk And Working Paper Reviews

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;">The Texas Education Agency (TEA) performs extensive reviews of audit working papers for selected Texas school district audits to evaluate the quality of audit services rendered by independent accountants. These reviews are referred to as Quality Control Reviews (QCRs). The TEA also conducts desk reviews of all audited financial statements issued by Texas independent school districts. During the desk review process, the TEA performs a limited check of the accuracy of financial statement amounts, completeness of financial disclosures, and existence of proper audit output. Prior research suggests that desk reviews and quality control reviews both measure audit quality (Colbert and O’Keefe 1995; Copley et al. 1994; Deis and Giroux 1992, 1996; Giroux et al. 1995; O’Keefe and Westort 1992; O’Keefe et al. 1994). The purpose of the paper is to determine if desk reviews capture the same audit quality information as quality control reviews. If so, regulators should focus resources on desk reviews since they are more timely and economical than QCRs. The results of the study, however, indicate that desk reviews and quality control reviews do not measure the same constructs. The findings suggest that desk reviews measure the industry specific knowledge of the auditor, which is only one aspect of audit quality. Moreover, it was observed that some audits passing the desk review were graded low in quality by the working paper review. This finding suggests that low audit quality may be more prevalent than generally suspected and that steps to improve audit quality and auditor credibility are warranted.<strong style="mso-bidi-font-weight: normal;"></strong></span></span></p>

An analysis of audit fee premiums of the merged audit firm in Malaysia

After the Big 6 merger exercise in 1998, PriceWaterhouseCoopers (PWC) has become the industry market leader that provides high quality audit services. Consequently, it has acquired a greater capacity to develop expertise and provide better quality audit services. It is expected that PWC charges fee premiums in return on investment for the capacity building. This study investigates how audit fee (AF) premiums and how it relates to auditors' industry specialisation and reputation. The study utilises data of 679 Bursa Malaysia listed companies in 2001 and 796 in 2005. AF premiums are calculated using the Simunic (1980) AF model. Industry specialisation is determined based on the number of audit clients at 20% threshold. Results indicate PWC obtains highest average AFs, hence, maintains its industry leadership. Results show that PWC does not charge AF premiums over and above the amount charged by the Big 5/4 regardless of whether they are industry specialists or not, except on smaller clients.

Public oversight of the audit profession – Comparison of implemented practices in the EU and the U.S.

Following financial scandals at the turn of the century, the audit profession in the European Union, the United States and elsewhere, has undergone profound legislative and regulatory reforms, including the requirement for intense public oversight of the profession. The article provides an overview of the development of external quality assurance systems in the audit profession in the EU and the U.S. with emphasis on the system of public oversight, implemented after the passing of the Sarbanes-Oxley Act of 2002 in the U.S. and the Statutory Audit Directive of 2006 in the EU. The aims of the article are: 1) to explain different backgrounds of external quality assurance systems in the EU and the U.S., 2) to describe implemented practices related to the public oversight system in the two regions and 3) to present the main findings of the existing empirical research focusing on the impact of the newly established systems of public oversight on the quality of audit services. Our literature research reveals that the evidence on the impact of the public oversight on the ultimate audit quality in the EU has not yet been provided because the Member States have only finished the implementation of the Statutory Audit Directive requirements into national legislations by the year 2008. In the U.S., on the other hand, first empirical evidence has been presented, suggesting that the quality of auditing has improved after the passing of the Sarbanes Oxley Act of 2002. So far evidence has been provided to support the proposition that PCAOB opinions are associated with earnings quality of the audit firm’s clients, that auditors have become more conservative and that the new inspectors (as opposed to the former system of self-regulation) can hold the auditors to stricter standards by taking concrete actions against felonious auditors and imposing costly penalties.

Characteristics on the Audit Service Quality

Characteristics on the Audit Service Quality

The impact of corporate governance on auditor choice: Evidence from China

As the largest and fastest growing emerging market, China is becoming more and more important to investors throughout the world. The purpose of this paper is to investigate the determinants of firms’ auditor choice in China in respect of their corporate governance mechanism. Normally firms have to take a trade-off in their auditor choice decisions, i.e., to hire high-quality auditors to signal effective audit monitoring and good corporate governance to lower their capital raising costs, or to select low-quality auditors with less effective audit monitoring in order to reap private benefits derived from weak corporate governance and less-transparent disclosure (the opaqueness gains). We develop a logit regression model to test the impact of firms’ internal corporate governance mechanism on auditor choice decisions made by IPO firms getting listed during a bear market period of 2001–2004 in China. Three variables are used to proxy for firms’ internal corporate governance mechanism, i.e., the ownership concentration, the size of the supervisory board (SB), and the duality of CEO and chairman of board of directors (BoDs). We classify all auditors in China into large auditors (Top 10) and others (non-Top 10), assuming the large auditors can provide higher quality audit services. The empirical results show that firms with larger controlling shareholders, with smaller size of SB, or in which CEO and BoDs chairman are the same person, are less likely to hire a Top 10 (high-quality) auditor. This suggests that when benefits from lowering capital raising costs are trivial, firms with weaker internal corporate governance mechanism are inclined to choose a low-quality auditor so as to capture and sustain their opaqueness gains. On the other hand, with improvement of corporate governance, firms should be more likely to appoint high-quality auditors.

Audit service quality in compulsory audit tendering

PurposeThe paper aims to analyse audit service quality attributes that were perceived to be important in compulsory audit tendering (CAT) in local councils in New South Wales (NSW). It focuses principally on whether CAT leads to an impairment of auditor independence and audit quality.Design/methodology/approachA questionnaire survey was conducted of 235 NSW local council finance professionals and 35 local council internal auditors in May 2006.FindingsThe most important attributes in evaluating audit service quality were industry expertise, audit firm experience with a council, technical competence, independence, ethical standards and due care. The least important attributes were scepticism, freshness of perspective, audit firm size, and non‐audit services. There is considerable consistency in the findings with those in non‐CAT contexts.Research limitations/implicationsThe paper is subject to the general limitations of the survey questionnaire method. A further limitation is that audit quality was assessed using perceptions of audit service quality by preparers of local council financial statements, rather than by users of those statements.Practical implicationsAudit firms will be better able to understand the audit service quality attributes valued by local council clients, to differentiate their promotional and service‐provision strategies, improve their audit quality, and better satisfy local council clients. Concerns that CAT may impair audit independence and audit quality do not appear to be founded.Originality/valueBecause the results are generally consistent with findings in non‐CAT contexts, there can be more confidence in CAT as a regulatory form of audit procurement.

Audit Service Quality: An Analyzed Empirical Investigation of the Affecting Factors: The Auditor's Perspective

Audit Service Quality: An Analyzed Empirical Investigation of the Affecting Factors: The Auditor's Perspective

When Inconvenient Observation Meets Comfortable Myth - A Fresh Look at Audit Quality

By convention, the quality of an audit is understood to relate to the joint probability that its conduct results in the detection and reporting of material financial statement errors. Early research into this phenomenon suggested a positive relationship between audit firm size and audit quality. This has resulted in a plethora of studies in which a fundamental element of the research design has been to segment data samples into portions relating to and small audit firms and to test for evidence of audit quality differences apparently associated with the size of the firm conducting the audit. Many such studies have concluded that larger audit firms do indeed provide higher quality audit services. Typically however, the quality of audit services provided by firms (of which there are very few) has been assumed to be or treated as homogenous. While the collapse of Arthur Andersen lead to some work which questioned this approach, on the whole, the large firm homogenous quality assumption stands. This paper examines the quality of disclosures pertaining to the high risk issue of goodwill impairment testing made by a sample of large Australian listed corporations in the first year after their transition to A-IFRS. All firms in the sample were clients of Big 4 auditors. However, disclosure quality and compliance levels varied substantially, with audit firm identity appearing to explain a substantial proportion of observed cross sectional variation.

Service quality, client satisfaction and loyalty towards audit firms

PurposeThe purpose of this paper is to explore the relationship between audit service quality, client satisfaction and loyalty to the audit firms. SERVQUAL model was used to measure the perceptions and expectations of public listed companies on the services received from audit firms.Design/methodology/approachThe five dimensions of SERVQUAL, i.e. reliability, assurance, tangibility, empathy and responsiveness was used to measure the service quality of audit firms. The research was conducted using primary data. Questionnaires were sent to 500 public listed companies listed in Bursa Saham Malaysia for year 2005.FindingsThe public listed companies were satisfied with the tangible dimension but were dissatisfied with the other four dimensions. The most dissatisfied dimension was empathy. Customer satisfaction was found to partially mediate the relationship of reliability and customer loyalty.Research limitations/implicationsThe small sample size is a limitation of the study. Also, the study examined all services offered by audit firms. A larger sample size and focusing on a particular service would be better as the respondents would then be able to give a more focused answer. Also, the public listed companies were not analysed further into various industry types, size of firm and other corporate attributes to understand their different needs.Practical implicationsThe study defines the attributes of quality services from the clients' perspective. Once the needs are more clearly known and understood, the audit firms will be in a better position to anticipate clients' requirement rather than to react to clients' dissatisfactions.Originality/valueThe paper uses a marketing model, SERVQUAL, to measure the service quality of audit firms.

정보시스템감리의 서비스품질요인이 감리품질과 고객만족에 미치는 영향

정보시스템의 위험 및 역기능 방지와 더불어 정보시스템의 품질을 제고하기 위한 정보시스템 감리에 대한 중요성과 그 수요가 증가하고 있다. 더불어 감리내실화와 신뢰성제고를 위한 기술연구와 제도연구도 지속적으로 수행되어왔다. 그러나, 감리의뢰기관이 감리에 대한 본질적 측면의 이해 부족, 감리인의 자질 및 신기술에 대한 이해 부족과 대상업무파악 미흡으로 형식에 치우치는 측면이 있어 정보시스템 감리의 서비스 품질이 상대적으로 취약하여 감리의뢰기관이나 피감리 기관으로부터 신뢰를 얻지 못하고 있다. 본 연구에서는 감리서비스 품질요인과 감리품질간의 관계를 규명하고, 나아가서 감리품질과 고객만족도간의 관계를 규명하고자 하였다. 연구결과, 감리인의 감리능력, 대응성은 감리품질에 유의한 영향요인이며, 또한 감리품질은 감리만족도에, 그리고 감리인의 감리능력, 신뢰성, 대응성이 감리만족도에 유의한 영향을 미치는 것으로 밝혀졌다. The importance and demand about IS(information system) audit we increasing to raise quality of IS and prevention of the IS risk and dysfunction. Technology and system research for the substantiality and raising reliability of IS audit are continuously performed. But, there are misunderstanding of audit clients about IS audit, insufficiency of auditor's ability and misunderstanding of new technology and target business area. Therefore, is not getting trust from client or system integrator because service quality of IS audit is weak relatively. This study aims at survey correlation between audit service quality factor and audit quality, between audit quality and customer satisfaction. The results of this study are as follow. Auditor's ability, correspondence has a significant effect on audit quality, also audit quality on audit satisfaction, and Auditor`s ability, reliability has a significant effect on audit satisfaction.

A measure of perceived auditor ERP systems expertise

PurposeThe purpose of this study is to develop, assess, and provide uses for a measure of perceived enterprise resource planning (ERP) systems expertise for financial statement auditors. ERP systems are the dominant system used by the public company clients of audit firms. In such settings, the Theory of Planned Behavior suggests that auditor perceptions of their own ERP systems expertise should influence their perceived behavioral control and, in turn, explain auditor behavior.Design/methodology/approachA five‐item measure of perceived ERP systems expertise is developed from a review of audit expertise studies and the Theory of Planned Behavior.FindingsAn assessment of the measure shows that it possesses a high level of reliability and construct validity (i.e. convergent and discriminant validity). Factor analysis results indicate that all five items satisfactorily load on one factor. The results also suggest that auditors' perceptions of ERP systems expertise are not simply a by‐product of general audit experience (AUDEXP).Practical implicationsDiscusses possible future uses of the measure, including whether the measure explains auditor control testing performance and the customization of the measure for IT audit specialists and internal auditors.Originality/valueThis study's measure should provide researchers with a tool to examine how auditor self‐perceptions of ERP systems expertise can affect auditor behavior and the quality of contemporary audit services.

A Measure of Auditor AIS Expertise: Development, Assessment, and Uses

The purpose of this study is to develop, assess, and provide uses for a measure of accounting information systems (AIS) expertise. A nine-item measure of AIS is developed from a review of studies and pre-tests with accounting students. An assessment of the measure shows that it possesses a high level of internal consistency and construct validity (i.e., convergent and discriminant validity). Factor analysis results indicate that all nine items satisfactorily load on one factor. Given that the nine items are designed to measure self-assessments of AIS expertise, this factor is labeled auditor AIS expertise for the purposes of this study. In addition, the results suggest that AIS is a unique and separate domain of and not simply a by-product of general audit experience. Possible future uses of the measure, such as determining the effects of AIS on the identification of AIS-related control weaknesses and the customization of the measure for IT audit specialists and internal auditors, are discussed. Given the increasing complexity of corporate AIS, this study's measure should provide researchers with a tool to examine how auditors' knowledge of AIS can affect the quality of contemporary audit services.