Audit Quality Research Articles

Determinan Kualitas Audit dimoderasi oleh Komite Audit

This study aims to analyze the factors that influence audit quality variables, especially audit tenure and the reputation of the Public Accounting Firm. In addition, this study examines whether the audit committee can strengthen or weaken the improvement of audit quality in the company. This study uses quantitative methods, and the data source is secondary data. The population of this study consists of 30 IDX companies listed on the Indonesia Stock Exchange (IDX) from 2016 to 2021. The population and sample in this study are IDX 30 companies listed on the IDX in the 2016-2021 period. The sample was selected using the purposive sampling method. There are 16 companies listed on the Indonesia Stock Exchange in IDX, 30 companies during 2016-2021 that match the researcher's criteria. The analytical methods used in this study include descriptive statistical analysis, logistic regression analysis, and moderation hypothesis testing using moderated regression analysis. This study found that audit tenure has no impact on audit quality. However, KAP size was found to affect audit quality significantly. The Audit Committee is unable to moderate the effect of Audit Tenure on Audit Quality; The Audit Committee is unable to moderate the effect of KAP size on audit quality.

Audit Quality, Board Dynamics, and Tax Strategies: Unraveling the Connections in Pakistan’ Corporate Sector

This study aim is to examine the effect of Demographic characteristics of the board of directors (Women on corporate board, Board size, Auditing firm, Size of a firm, Leverage and return on equity) on Tax Avoidance using a sample of30 big firms from different sectors listed in the stock exchange of Pakistan from 2010 to 2019. The study uses secondary data taken from the Balance Sheet of firms and SCS trade. To analyze the data, the Panel data regression model used to observe the result of the demographic characteristics of the board of directors on tax avoidance. The results indicate that a firm audited by Big-4 reduces the corporate tax avoidance. Additionally, firms with a larger size of board of directors are associated with more tax avoidance. However, the presence of women on the board of directors does not reduce the corporate tax avoidance.

EARNING MANAGEMENT IN MANUFACTURING COMPANIES IS INFLUENCED BY COMPANY CHARACTERISTICS AND AUDIT ELEMENTS

This study seeks empirical evidence regarding the effect of growth opportunities, leverage, fixed asset turnover, profitability, company size, company age, audit quality, audit independence, and audit committee on earnings management. This study uses the reporting of manufacturing companies listed on the Indonesia Stock Exchange from 2016 to 2018. The research sample consisted of 309 data, which were selected as the final sample using purposive sampling. This study uses multiple regression analysis with the SPSS program to test the relationship between independent and dependent variables. The results of this study indicate that the variables of growth opportunity, profitability, and audit quality affect earnings management. While the variables of leverage, fixed asset turnover, company size, company age, audit independence, and audit committee do not affect earnings management.

Remote Auditing, Aspect of Auditor Behavioral and Use Of Technology

This scoping review aims to map out existing studies related to remote auditing that focus on the topics of auditors' behavioural and technology use. The importance of auditors' adaptation to the challenges posed by the pandemic and the need for improved skills and knowledge in the face of a changing work environment. This review refers to five stages, namely: 1) identification of research questions; 2) identification of relevant research; 3) selection of articles; 4) data mapping; and 5) compiling, summarising and reporting the results. The time span of the article is 2021-2024. The results of this review revealed that most studies recognised an increase in the efficiency of their daily tasks in terms of remote auditing. However, there is still debate regarding auditor behaviour that is influenced by remote auditing activities, which is feared to reduce skepticism. In addition, the use of technology in remote auditing brings data security threats. Therefore, further research is needed to uncover auditor scepticism and data security in remote audit activities. This review is expected to provide greater insight into the importance of remote auditing, auditor adaptation to change, and technology utilisation in improving audit quality in today's digital era

Local Government Internal Audit Quality: Input Factors, Individual Level (Study on Inspectorate Auditors in North Sulawesi Province)

Local Government Internal Audit Quality: Input Factors, Individual Level (Study on Inspectorate Auditors in North Sulawesi Province)

The Influence of Auditor Competence and Independence on Internal Audit Quality: The Mediating Role of Risk-Based Audit

The Influence of Auditor Competence and Independence on Internal Audit Quality: The Mediating Role of Risk-Based Audit

The impact of internal audit quality on fighting corruption in the Qatari public sector

The impact of internal audit quality on fighting corruption in the Qatari public sector

Competitive Strategies for Small Audit Firms

Synopsis The research problem We examine whether small audit firms adopt niche strategies to compete in the public company audit market. To that end, we focus on auditors servicing clients from one industry only (which we label as a nationwide single-industry focus) and test its association with audit quality and pricing. Motivation Prior research on auditor competition has mainly focused on the large (mainly Big Four) audit firms. While large and small audit firm markets are two distinct markets, little is known about competitive strategies of small audit firms in the public company audit market. The test hypotheses Our first hypothesis is that small audit firms adopting a single-industry focused strategy supply higher audit quality compared with audit firms that do not adopt a single-industry focused strategy or a simple industry specialization strategy, ceteris paribus. Our second hypothesis is that small audit firms adopting a single-industry focused strategy engage in discount pricing compared with audit firms that do not adopt a single-industry focused strategy or a simple industry specialization strategy, ceteris paribus. Target population The U.S. commercial banking sector covering the period 2004–2020. Adopted methodology Multivariate analyses adopting linear and probit models. Analyses To test our first hypothesis, we run a bank audit quality model using loan loss provisions as the dependent variable for our main analyses. Subsequent analyses adopt restatement, going concern, and internal control weaknesses models. To test our second hypothesis, we rely on a bank audit fee model. All models include relevant controls established in previous research and those for self-selection. Findings The evidence suggests that small audit firms adopting a nationwide single-industry focus are able to provide higher audit quality (compared with other rivals, even industry specialists) while at the same time charging lower audit fees implying cost efficiencies that are passed on to the client due to their focused expertise.

Audit Committee as A Moderating Variable: Factors Influencing Audit Quality in Financial Sector on the IDX

This study aims to determine the effect of audit quality, namely audit tenure, audit rotation, and audit fees on audit quality in financial sector companies listed on the Indonesia Stock Exchange. In addition, this study also aims to determine whether the audit committee can be used as a moderating variable in the model. The type of data used in this research is secondary data. The technique of determining the sample is using purposive sampling. The samples obtained in this study were 17 manufacturing companies listed on the IDX from 2017 to 2021. The data analysis technique used was panel data regression analysis and interaction test (moderating) which was carried out with the help of EVIEWS version 10 software. The results in this study indicate that partial tenure audits have a positive effect on audit quality and are not significant. Audit rotation has a negative effect on audit quality and not significant. Audit fees have a negative effect on audit quality and not significant. The audit committee is unable to moderate audit tenure, audit rotation, audit fees on audit quality. The audit committee is unable to moderate audit tenure, audit rotation, audit fees on audit quality.

MODERASI AUDITOR PROFESSIONAL SCEPTICISMPADA KOMPLEKSITAS TUGAS AUDIT, LOCUS OF CONTROLDAN KUALITAS AUDIT

Audit quality is the result achieved from financial statements that are presented fairly, all material matters or provide a true picture according to the financial reporting framework in order to increase the trust of users of financial statements. The purpose of this study is to investigate whether the complexity of the audit task, and locus of control can affect audit quality and auditor professional scepticism can moderate the effect of audit task complexity, and locus of control on audit quality. Type of research is quantitative research, in this study the data collection method is the distribution of questionnaires via g-form. The data collected in this study are the results of questionnaires distributed to auditors at public accounting firms in Indonesia. The results of this study audit task complexity and locus of control have a positive effect on audit quality, auditor professional scepticism cannot moderate the effect of audit task complexity and locus of control on audit quality.Keyword: Audit Quality, Audit Task Complexity, Locus of Control, and AuditorProfessional Scepticism.

The Effect of Audit Report Lag, Regulation, Audit Fee Stickiness on Audit Quality with Economic Failure as a Moderating Variable

The Effect of Audit Report Lag, Regulation, Audit Fee Stickiness on Audit Quality with Economic Failure as a Moderating Variable

A systematic review of public sector audits in Indonesia

The literature on public sector auditing in Indonesia remains nascent and requires further exploration. This study aims to provide a comprehensive overview and serve as a reference for future research in this field by analyzing the trends, developments, and prospects for further research on Indonesian public sector audit literature. This study uses a systematic literature review covering 36 articles from 2015 to 2022. It also highlights recent advancements and outlines recommendations for further research. Seven key categories for future research are identified: audit quality, audit findings and opinions, fraud, auditor characteristics, financial report quality, transparency and accountability, and emerging themes. The findings indicate that even while academic publications are on the rise, more thorough and diverse research is still required. The study indicates that research on public sector auditing in Indonesia is still in its infancy, with chances to investigate fraud, audit quality, audit findings and opinions, transparency, accountability, and emerging themes. This study's contribution is that it offers a thorough summary and a point of reference for upcoming investigations into public sector auditing in Indonesia.

Audit Quality and Its Impact on the Earnings Management in the Post-COVID Era: Evidence from Sri Lanka

Audit Quality and Its Impact on the Earnings Management in the Post-COVID Era: Evidence from Sri Lanka

The Influence of Corporate Governance, Profitability, and Capital Intensity on Tax Avoidance in Manufacturing Companies Listed on the Idx in the Time Frame 2021-2023

Tax avoidance is a significant issue that can affect state revenues and fiscal fairness. Companies often use legal loopholes to reduce their tax liability, which while legal, is contrary to the primary purpose of tax laws. This study aims to find out and analyze corporate governance, profitability, and capital intensity affect tax avoidance in manufacturing companies in Indonesia. This study uses a quantitative approach with secondary data from the financial statements of manufacturing companies listed on the IDX. The independent variables in this study are corporate governance (audit quality and audit committee), profitability, and capital intensity, while the dependent variable is tax avoidance. Data analysis was carried out by normality, multicollinearity, heteroscedasticity, autocorrelation, and hypothesis test using the t-test and the F test. However, simultaneously, audit quality, audit committee, profitability, and capital intensity affect tax avoidance. The study implies that an increase in the number of audit committees and investment in fixed assets can reduce tax avoidance. These findings can be a reference for policymakers and corporate management in improving corporate governance to minimize tax avoidance practices.

Partner wealth and audit quality: evidence from the United States

AbstractUsing the market values of audit partners’ houses as a measure of their personal wealth, we find that wealthier U.S. partners provide higher-quality audits, as evidenced by fewer material restatements, fewer material SEC comment letters, and higher audit fees. A battery of falsification tests shows that these findings are not driven by the matching of wealthier partners with clients with higher financial reporting quality. Our additional analyses suggest two explanations: greater personal wealth both incentivizes partners to exert more effort in delivering high-quality audits and reveals partners’ audit competence.

Digital transformation and corporate audit risk: Mediating effects of auditor behavior

Digital transformation has emerged as a critical factor in shaping the modern business landscape, with significant implications for corporate governance and audit risk. This study examines how digital transformation affected corporate audit risk in Chinese A-share listed companies from 2011 to 2022. Employing comprehensive empirical analyses, we discover that corporate audit risk is greatly decreased by digital transformation, with this relationship partially mediated by changes in audit fees, audit input, and audit opinions. The effects are more pronounced in state-owned firms. Our findings highlight the importance of integrating digital tools in auditing practices to mitigate risk and enhance audit quality. This study contributes to the understanding of how digital transformation influences auditor behavior and audit processes, providing valuable insights for policymakers and corporate managers in the digital era.

Audit Expectation Gap: A Bibliometric Analysis Based on Scopus And WoS Data (1992-2024)

In this study, the concept of the expectation gap (AEG), which is thought to be at the center of the criticism towards the audit profession, is discussed. The AEG can be explained as the difference between the performances and expectations of the parties to the audit. The aim of the study is to examine the current status and global trends of AEG scientific publications in Scopus and Web of Science databases with bibliometric analysis. For this purpose, in the search conducted with the keyword "Audit Expectation Gap" in both databases, 117 publications covering the years 1992-2024 were evaluated comparatively. The data were analysed by using Excel and VOSviewer programs. The findings show that approximately 40 per cent of AEG research has been conducted in the last five years. The leading countries are the United Kingdom, Australia, Malaysia and Iran. The most productive authors are Humphrey, C., Coram, P. J. and Lee, T.H. The common keywords that stand out are auditing, auditors, auditor’s report, key audit matters and audit quality. The overlap rate of the databases is 35% and the coverage of Scopus was found to be wider. To the best of the author’s knowledge, this is the first study to evaluate the effects/interactions of AEG research in terms of both databases. Keywords: Audit, Expectation Gap, Bibliometric Analysis, Scopus, WoS, VOSviewer JEL Codes: M42, C88

The impact of it governance on audit outcomes and footnote readability for public companies in Indonesia

This study explores the relationship between IT governance and audit outcomes, including audit costs, quality, report lag, opinions, and the readability of financial statement footnotes in Indonesian public companies. Utilizing regression analysis, the research finds that while IT governance does not significantly affect audit costs, report lag, or opinions, it positively influences audit quality. Contrary to expectations, higher IT capabilities do not lead to increased audit costs but reduce them by lowering audit efforts. Furthermore, IT governance does not notably impact footnote readability, potentially due to information overload in annual reports. These findings shed light on the importance of IT governance in shaping audit quality and provide valuable insights for stakeholders in Indonesian public companies. Further research is encouraged to explore these relationships in different contexts and industries.

Internal Audit Practices and Quality of Financial Reports of Listed Consumer Goods Manufacturing Firms in Nigeria

The quality of financial reporting has remained an issue of significant concern among professional accountants, regulators, and other users of financial information. This is because financial reporting has been a principal means of communicating result of financial transactions and events which transpired within the organization. To that end, this study investigated the relationship between internal audit practices and financial reporting quality of consumer goods manufacturing in Nigeria. The research design used in this study was descriptive survey. The targeted population of this study consists of all the twenty-one (21) listed consumer goods manufacturing firms in the Nigerian Exchange Group (NGX) with a respondent total of two hundred and ninety (290). The sample size of the study consists of ten (10) consumer goods manufacturing firms that have branches in South-South, Nigeria using purposive sampling technique. The study employed primary data sourced from questionnaires administered to the respondents and two hundred and fifty-one (251) representing a response rate of 86.6% was used as sample size for the study. The study used content validity and Cronbach alpha reliability test was used to determine the statistical reliability of the instrument. Descriptive statistics such as frequencies, percentages, means, and standard deviations and spearman rank correlation were used in data analysis. Findings indicated that a positive and significant relationship between internal audit control mechanisms and timeliness of financial reports, a positive and significant relationship between internal audit risk management and timeliness of financial reports, and a positive and significant relationship between management support and timeliness of financial reports of consumer goods manufacturing firms in Nigeria. Based on the findings, this study concluded that, internal audit practices positively and significantly influence financial reporting quality of consumer goods manufacturing firms in Nigeria. The study recommended amongst others that consumer goods manufacturing firms in Nigeria should adopt the effective use of internal audit activities since it has positive and significant influence towards an improvement in financial reporting quality.

THE FUTURE OF AUDITING PROFESSION IN THE FACE OF AUDITORS’ LIABILITY: A REVIEW OF LITERATURE

This study examined the global issue of auditors’ negligence cases, which have led to doubts about the reliability of audit reports and raised concerns about the future of auditing profession. This research conducted a thorough literature review to deeply explore auditors' roles and responsibilities. It investigated the legal responsibilities auditors face and their impact on the credibility of their reports, while considering approaches to mitigate these liabilities and the involvement of professional bodies. Findings indicated that auditors' legal liabilities significantly impair audit quality, the trustworthiness of audit reports, and overall professional skepticism. The research revealed the urgent need for improved risk assessment techniques to uphold audit integrity and credibility, while effectively addressing liability concerns. The conclusion is that in order to promote resiliency, trust, and adaptability in the profession, the future of auditing depends on redefining auditors' culpability. The study suggested collaboration among policymakers, professional associations, and standard-setting entities to establish legal and regulatory frameworks. Additionally, the study emphasized the value of ongoing professional development for audit firms and the cultivation of a culture of professional skepticism within the auditing profession. Key words: Audit reports; Auditors’ liability; Auditors’ negligence; Credibility; Reliability