Perceptions Of Auditors Research Articles

Integrated Reporting Assurance: Perceptions of Auditors in Sri Lanka

The purpose of this paper is to identify the perceptions and differences in the perceptions between the auditors on the assurance service of integrated reporting in Sri Lankan context. This research mainly focuses on the importance of assuring the IR, form and content of an audit report on IR, challenges of assuring IR and future of the IR assurance. The population of the research consists of auditors who provide assurance services on Integrated Reporting in Sri Lanka. Two hundred questionnaires were sent to assurance experts through the emails generating 115 usable responses. The analysis is done using non-parametric statistics which is the Kruskal-Wallis test. Empirical results prove that it is necessary to have an external assurance on an entity’s integrated report and it is important to audit the complete content of integrated reporting. When comparing the auditors' perceptions based on their respective rankings, the results indicate that there is a noticeable difference in how auditors view the necessity of Integrated Reporting (IR) assurance and their opinions on the appropriate level of assurance. Limiting the study to a single jurisdiction is an inherent limitation. In this paper differences and similarities are evaluated based on only the rank of the assurance providers. The findings of this research could be valuable for the International Integrated Reporting Council, the International Auditing and Assurance Standards Board, and other regulatory agencies and useful for academics and practitioners interested in providing assurance on IR.

Public auditors’ perception of digital platforms for popular reporting: insights from the case study of OpenBDAP

PurposeThis paper employs the Biondi and Lapsley (2014) accounting information transparency model to investigate whether effective transparency can be achieved through digital platforms for popular reporting. In order to address the limitations in previous research, which predominantly targets non-expert users, this is attained by focusing on the perception of local government auditors. By engaging auditors who are experts in accounting, the study aims to investigate if any cognitive biases in the design of online platforms could impact the achievement of a sophisticated understanding with shared meanings among citizens.Design/methodology/approachThe study adopts an explorative and inductive approach, semi-structured interviews and an online survey among the Italian local governments’ Professional Auditors’ Association (ANCREL). Auditors assessed the OpenBDAP (https://openbdap.rgs.mef.gov.it/) platform in facilitating the comparison and analysis of the budgets and financial statements of Italian public sector organisations.FindingsThe results present a nuanced assessment of OpenBDAP, highlighting a general consensus on its ability to enhance the access and understanding of financial data and the appreciation of the utility of infographics in understanding financial data. Therefore, a clear challenge emerges in achieving active engagement of stakeholders. Despite expectations expressed during interviews with the Italian National Accounting Office regarding the design of custom APIs to meet user needs, our findings indicate the potential presence of cognitive biases in the design of the online platform as key obstacles.Originality/valueBy extending the application of the Biondi and Lapsley (2014) model on digital platforms for popular reporting to local government auditors, this study highlights the potential presence of cognitive bias in the design of online platforms that may impact the achievement of effective transparency, an aspect not previously identified in existing research. Finally, it suggests that these popular reporting platforms may evolve beyond mere transparency tools, assuming a broader role as potent learning instruments. This transformation could help to address the inherent complexity of accounting information, which is the real obstacle to achieving transparency.

Drivers Affecting Internal Audit Consulting Services: Contrasting Views from Demand-Side and Supply-Side Perspectives

demand-side (external auditors and audit committees) and supply-side (chief audit executive and senior and middle-level internal auditors) perspectives on the drivers of internal auditor consulting services. Design/ Methodology/ Approach: An independent sample t-test was conducted using the SPSS to determine views on the differences between the two groups. The study collected the perceptions of 258 respondents, including 123 on the demand side (57 audit committee members and 66 external auditors) and 135 respondents on the supply side (60 heads of internal audit and 75 internal auditors). Research finding: On the demand side, there are significant differences in the perceptions of audit committee members and external auditors, except on senior management support, risk-based internal audits, and auditor skills and competencies. On the supply side, there are no significant differences between chief audit executives and internal auditors’ views, except on organisational culture and data analytics. Theoretical contribution/ Originality: This study extends internal audit research based on the resource-based view (RBV) theory, considering various influencing drivers (internal resources) from the perspectives of various stakeholders that affect internal auditors consulting services. Practitioner/ Policy implication: To improve the consulting services of the internal auditors, audit committees, external auditors, chief audit executives and internal auditors should develop an understanding of these conflicting views. Research limitation: Only listed companies in Bangladesh, which are better governed and regulated, were considered for data collection. Future research can focus on other developing countries and on unlisted companies. In addition, perceptions of other stakeholders, such as regulators and senior management, can also be taken into consideration.

Auditor Perceptions, Reactions, and Responses to PCAOB Inspection Feedback

ABSTRACT Guided by the performance feedback literature, we study PCAOB inspections as a nonstandard feedback event. We use an experiential questionnaire to collect and analyze perceptions, reactions, and responses to inspection feedback from 120 partners and managers subject to a recent PCAOB inspection. Despite varying perceptions, we find on average auditors perceive strong firm support but also that firms acquiesce to inspectors. Generally, the feedback source, inspectors, are perceived as professional, organized, and knowledgeable and auditors agree with the feedback message, perceiving it as consistent and well reasoned. We observe a range of auditor reactions (satisfaction with and motivated to use inspection feedback), responses at the engagement level (improvements to audit quality and inspection risk or impression management), and individual responses. Multivariate analyses show more positive feedback perceptions improve reactions, which enhance desirability of responses and are robust to considering the inspection outcome, offering insights for refining inspection interactions and processes.

Assuring the chairperson’s statement in the integrated report

The study aimed to design the auditing framework for the audit of the chairperson’s statement. The chairperson’s statement is one of the most read narrative disclosure statements in the integrated report. Non-financial information has become twice as important as financial information yet, it is not required by the International Financial Reporting Standard (IFRS). The chairperson’s statement is not audited and this leads to the use of impression management tactics. This study answers the call from different scholars who have called upon the audit of the chairperson’s statement to curve the use of impression management tactics. The mixed method is used for data analysis. Perception of external auditors is sought through the Likert scale and interviews to ensure triangulation. Descriptive statistics, correlation, and thematic analysis are used to analyze the data. The study found that auditors are aware of the existing concern about the use of impression management in the chairperson’s statement. In this regard, an audit of the chairperson’s statement is deemed appropriate and long overdue. External auditors are the most suitable experts to audit the chairperson’s statement and issue reasonable assurance. Secondly, auditors believe that the reliability of the chairperson’s statement is crucial and to ensure credibility, the company must have strong internal control, and report accurate and complete information in the chairperson’s statement. The auditing framework is designed and shown through an integrative conceptual model. The results are consistent with previous studies that emphasise the need for the assurance of non-financial information in the integrated report. This study triggers debates amongst accounting firms, standard setters, and policymakers on the adoption of the auditing framework for the chairperson’s statement to give assurance to the users. The study contributes to the body of knowledge with an auditing framework to audit the chairperson’s statement, the first of its kind. Lastly, the study adds to the developing debate on the assurance of narrative disclosure parts of the integrated report.

Sharia Banking Internal Auditors' Perceptions Regarding the Influence of Auditors' Sharia Knowledge Education on the Effectiveness of Sharia Compliance Inspections

Islamic banks need to ensure that their operations comply with sharia principles to increase loyalty and satisfaction of sharia bank customers. Internal audit has one of the functions of ensuring sharia compliance has been fulfilled in sharia banking by carrying out sharia compliance checks. One of the challenges in internal audit in carrying out its function is the lack of qualified sharia auditors who have adequate sharia knowledge. In this context, education in sharia science for auditors becomes very relevant. This research aims to identify the influence of formal and non-formal sharia education for auditors on increasing the effectiveness of auditing compliance with sharia principles in sharia banking according to the perception of internal auditors. The method used is a quantitative method by distributing questionnaires to internal auditors in conventional commercial banks that have Sharia Business Units. Based on the results of this research, the variable perception of formal sharia science education does not have a significant effect on the effectiveness of sharia compliance checks, the perception of non-formal sharia science education has a significant effect on the effectiveness of sharia compliance checks. Furthermore, simultaneously the variables of perception of formal sharia education and non-formal sharia science education have a significant effect on the effectiveness of sharia compliance.

Contributions of internal control to public governance: a study of the perception of internal auditors of federal educational institutions

Purpose: The article aims to analyze the perception of Internal Auditors of Federal Educational Institutions regarding the contributions of Internal Control to Public Governance. Methodology: Regarding the technical procedures for collecting research data, a structured questionnaire (Survey) with multiple choices was used, on a 10 (ten) point scale with alternatives of no agreement/a lot of agreement, with 1 being no agreement and 10 being very agreement. The analysis was carried out using Factor Analysis. Results: As a result of the research, it was identified that the factors: Risk-Based Audit Planning, Transparency, Public Integrity and Accountability, obtained the highest averages as contributions of internal control to public governance in the perception of the responding auditors. Factors such as the Provision of Consulting Services and Society Participation presented the lowest averages among the factors analyzed. After the factor analysis, it was found that the first factor, Adherence to International Auditing Standards, presents approximately 59.7% of the explanatory power of the variances contained in the sample. According to the auditors' perception, adherence or alignment with international auditing standards is representative of the evolution of the governance process in federal public administration. Contributions of the Study: The study contributes to the discussion on public governance regarding the contributions of internal control to its development. The results suggest that the process of adhering to international auditing standards is an irreversible process and recognized as necessary for the development of governance in the federal public sector, given that this adherence to international auditing standards presents itself as a factor with greater explanatory power in the analysis, signaling that for public administration to follow the evolution of its governance, it must remain integrated with international standards and best practices.

Measuring Growth in Ethical Discernment Among Upper-Level Accounting Students: Educational Interventions

Effective instruction produces growth in knowledge or movement of perceptions in a desirable direction. Ethics education is emphasized in accounting curricula, but measuring growth or movement is a challenge. The ARBC instrument measures student perceptions of ethical conduct using real-world vignettes. ARBC compared students in Auditing and MAcc classes to students in introductory Finance and Accounting Principles classes, benchmarked against experienced businesspeople and a reference group representing society. Perceptions of Auditing and MAcc students were far more similar to the business panel than the perceptions of the Finance and Principles students, with overall movement in desirable directions.

Factors Influencing the Audit Quality of the Municipalities

The study aims to analyze the Audit Quality (AQ) factors that were perceived to be necessary by the accountants and internal auditors in municipalities of Palestine. A survey of 309 accountants and internal auditors from 155 Palestinian municipalities was conducted. The questionnaire data was statistically analyzed using Smart PLS3 software. The study discovered that auditor ethics, independence, and competence were the most significant elements in determining AQ. Meanwhile, Internal Auditing (IA), Accounting Basis (AB), and the Laws and Regulations (LR) have a moderate effect. However, the least crucial factors were Audit Fees (AF) and Audit Firm Size (AFS). The study is limited by the survey questionnaire method’s general limitations and the perceptions of accountants and internal auditors. It offers evidence on AQ from Palestine, helps the audit firms distinguish their marketing and service delivery strategies, and understands the AQ aspects sought by those clients. Moreover, the study provides the municipal councils and the regulators of the municipalities with greater knowledge on how to select the best auditors and maintain internal control measures, notably IA and the use of the accrual basis in accounting procedures. Since the findings are generally consistent with previous studies, more emphasis can be placed on the effectiveness of municipal internal control.

Measures for enhancing auditor independence: Perceptions of spanish non-professional investors and auditors

Auditors fulfill a crucial societal role by increasing the credibility of financial reports, which requires that appropriate audit quality be provided and auditors are factually independent and perceived as such. So far, regulators and researchers have focused on a few measures for improving independence, namely the prohibition of non-audit services (NAS), audit firm and audit partner rotation, and joint audits. Despite these regulatory initiatives, accounting scandals still happen, and the independence of the auditors involved is questioned. Therefore, this explorative study aims to identify alternative measures that may strengthen auditor independence. Non-professional investors and auditors participated in a survey to identify promising independence-enhancing measures.Surprisingly, not only non-professional investors but also auditors support the implementation of many instruments. Non-professional investors rate measures related to oversight, controls, and sanctions as particularly useful. Likewise, auditors perceive measures for oversight and control as helpful but rank most sanctions lower than non-professional investors. They also support a stricter civil liability and rank some direct independence-improving measures as highly useful. Overall, the participants perceive a greater need for improving the independence of public interest entity (PIE) auditors.This explorative study widens the research horizon by adding alternative measures for improving independence in appearance. Thus, researchers may identify promising avenues for future research. Also, the paper is of interest to regulators and potentially helps in setting independence standards. Auditors and audit committees can identify opportunities for taking voluntary actions to ensure factual and perceived auditor independence.

Is There No Sin Down South of the Equator? Brazilian Auditors’ Perception of the Gendered and Racialized Dynamics in Audit Firms

ABSTRACT We aim to analyze the perception of Brazilian auditors regarding differences in career development for women and black people. Methodologically, we conducted a web survey totaling 329 answers from professionals with diverse profiles regarding the length of service, job position, age, sex, and race. The results show that even men perceive the career as being harder for women. An important finding is that the main difficulties are found in medium and small-sized auditing companies. We contribute to the literature on three fronts: (i) by expanding the theme to cover medium and small-sized companies; (ii) by bringing to the Brazilian scenario the discussion on the perception of differences in the careers of external auditing professionals; and (iii) by contrasting perceptions about the career and the environment for professionals from diverse groups in terms of sex and race. As a practical implication, we conclude that if there is an interest in turning audit into a more just and equitable profession, much has to be changed in auditing careers, even in companies situated to the South of the Equator, so that the sins from elsewhere would not be the same here, sins that were imposed by a colonial conceptualisation of gender and race.

The Influence of Internal Audit and Risk Control on Crisis Management in the Tourism Industry in Indonesia

This research investigates the complex interactions between Internal Audit, Risk Control, and Crisis Management in the dynamic landscape of Indonesia's tourism industry. Using a quantitative approach, this study employed Structural Equation Modeling with Partial Least Squares (SEM-PLS) to analyze survey data collected from stakeholders in the industry. Descriptive statistics showed positive perceptions of Internal Audit and Risk Control, with room for improvement in Crisis Management effectiveness. Measurement model assessment established reliability and construct validity, paving the way for robust structural model analysis. The results show that Internal Audit and Risk Control significantly and positively influence Crisis Management. Practical implications include customized strategies for optimal crisis resilience, while policy recommendations underscore the importance of a standardized framework. Despite its limitations, this study contributes valuable insights to the crisis resilience literature, offering a nuanced understanding of the dynamics of Indonesia's tourism sector.

Perceived effects of key audit matters reporting on audit efforts, audit fees, audit quality, and audit report transparency: stakeholders’ perspectives

PurposeThis paper aims to examine the perspectives of auditors, regulators and financial report preparers on the effects of key audit matters (KAMs) reporting on audit effort, fees, quality and report transparency.Design/methodology/approachThe authors conducted 21 semi-structured interviews with stakeholders (13 Audit Partners, 5 Chief Financial Officers and 3 regulators) and thematically analysed the interviews. They use the frame of “Paradox of Transparency” to explain the findings.FindingsAuditors perceive that the overall quality control of their audits has improved both in the planning and execution stages, and such improvement can mostly be attributed to the coercive pressures from professional bodies and regulators. Nevertheless, audit fee remains unchanged. Auditors disclose industry generic items and descriptions of KAMs, sometimes masking the real problem areas of the clients. Even after improving the performative audit quality, transparency of audit reporting has not improved. Issues that warrant going concern qualifications or audit report modifications are now reported as KAMs. Hence, KAMs reporting might make the audit report less transparent.Practical implicationsLocalised audit environments and institutions affect the transparency of KAMs reporting. Without attention to corporate governance and auditors’ independence issues, paradoxically, performative improvement in audit quality (due to the KAMs reporting requirement) does not enhance the transparency of audit reports.Originality/valueTo the best of the authors’ knowledge, this study is the first to provide field-level evidence in Bangladesh and other developing countries about the perceptions of auditors, financial report preparers and regulators on the effects of KAMs reporting on audit efforts, fees, quality and report transparency.

Analysis of the perception of auditors from a federal public network HEI concerning the institutionalization of internal control practices

Purpose: To analyse the perception of auditors from a federal public network HEI on the institutionalization of internal control practices.
 Methodology: The questionnaire was administered to internal auditors from a federal public network HEI, and the content of their answers was analysed using Iramuteq® software. The software resources used were factor analysis, similarity analysis and word clouds. These resources served to capture the intended meanings in the set of answers of the three research participants and how their words are associated with the institutionalization of control practices.
 Results: The auditors presented a more critical perception of the institutionalization process in the sedimentation phase of internal control practices, although they reported aspects that confirm actions corresponding to all phases of this process in the focal HEI.
 Contributions of the Study: This study confirms that internal auditors from a public HEI in the federal network better perceive the practices of internal control when they are in the sedimentation phase, which influences their evaluation of these university practices.

Time Out: Auditor Perceptions and Audit Outcomes When Moving Away from a Time-Based Budget Audit Model

SYNOPSIS The purpose of this study is to examine the benefits and costs of an alternative to the traditional time-based budget audit model. We survey auditors who participated in a real-world, firm-designed, non-time-based budget (NTB) model pilot program during which several engagement teams were not provided with a time budget and auditors did not track time. Results suggest auditors appreciated the autonomy the NTB model allows, felt it improved teamwork, reported less concern about performance evaluations, felt empowered to deliver value-added services to the client, and indicated greater work-life balance and job satisfaction. Firm-provided proprietary archival evidence suggests that efficiency did not differ across the two models, as the timing of audit procedure signoffs was not negatively impacted under the NTB model. Overall, our results suggest a NTB model may be a viable option for audit firms looking to decrease their reliance on time-based budgeting. Data Availability: Please contact Erin M. Hawkins.

Pengaruh Love Of Money, Religiusitas, dan Time Budget Pressure terhadap Persepsi Etis Auditor

Ethics is still a polemic in the world of auditors, especially with the increasing number of ethical cases involving auditors. Many factors can compromise an auditor's ethical perception. This research was conducted to empirically test the influence of love of money and religiosity on auditors, as well as time budget pressure during audit assignments on auditors' ethical perceptions. This research took the population and a sample of 31 respondents in the form of auditors working at Public Accounting Firms in DKI Jakarta using the questionnaire method as the data collection method. In this research, the data analysis technique used is multiple linear regression analysis via SPSS. This research provides results that the love of money variable has a positive influence on auditors' ethical perceptions. These results explain that the higher the love of money an auditor has, the more it will influence the auditor's ethics. The religiosity variable in this study has a positive effect on auditors' ethical perceptions, where these results show that the higher the auditor's level of religiosity, the more ethical the auditor will behave in carrying out his work. The research results for the time budget pressure variable explain that time budget pressure has no influence on auditors' ethical perceptions. These results indicate that pressure on the time budget during an audit engagement does not affect the auditor's ethical behavior in his work. Even though auditors have a limited time budget, they can carry out their work in audit engagements in accordance with a professional code of ethics honestly and with integrity.

Collegial Collective Relationship of BPK Auditors and Follow-up of Audit Results

Abstract. This study aims to explore the collegial collective relationship between BPK members and follow up on the results of the examination. The approach used is the descriptive qualitative research method. Data were collected through interviews with 8 auditors from the DIY Representative BPK. The interview was conducted to explore the perception of the BPK auditors regarding the collegial collective relationship between members and the follow-up to the results of the examination. The results of this study indicate that there is a collegial collective relationship between BPK members. Since the existence of a collegial collective relationship between BPK members, there is no longer domination of the BPK chairman in deciding a policy. Policies that are strategic and have a national impact will be decided jointly by all members of the BPK (team 9 or agency members). If consensus is not reached, a vote is held to seek the most votes. Regarding the follow-up examination, when the auditor and the review team find any deviations, the follow-up is carried out by giving a kind of management letter to the auditee. BPK's findings must be followed up by returning the amount of money found. If the finding exceeds Rp10,000,000 must be reported in the LHP.
 

Artificial Intelligence and Philosophy of Humanism in Auditor Perceptions

This study aims to interpret the humanistic thinking of Chinese philosopher Confucius on the activity of integrating Artificial Intelligence (AI) into the process of auditing financial statements. The qualitative-interpretive method was used for research purposes through in-depth interview techniques which were addressed to informants from audit firms that had used AI. The validity of the information was tested using triangulation of data sources from different audit firm informants. The main findings show that as humans who have cognitive, moral and ethical abilities, auditors can collaborate with AI without worrying that the existence of this profession will be completely replaced by AI. However, excessive integration and tend to rely on auditors should be aware of so that high-tech assisted audit objectives such as AI work in harmony without eliminating the auditor's humanism such as skepticism and professional judgment that AI does not have. Social and ethical issues are challenges in the use of AI and solutions will continue to be sought. Therefore, the auditor always maintains critical thinking, especially on the elements contained in AI technology, namely system predictability, dependability, reliability, robustness, understanding, explanation of intent, usability, and user familiarity with AI technology.

Factors Affecting Audit Quality: Evidence from Jordan

This study aims to recognize the factors that affecting the quality of audit from the perception of external auditors in Jordan, namely (professional competence and auditor qualification, auditor availability and independence, auditor professional experience, auditor aware of the importance of audit quality, audit fees), by analyzing the study variables and showing their impact on the audit quality and making recommendations on raising the level of performance of the profession. To achieve the objectives of the study and test its hypotheses a questionnaire will be designed after reference to previous studies, International Auditing Standards, and legal accounting regulatory Law No. 73 of 2003. Keywords: audit quality, professionalism, availability, professional experience, audit fees.

IT Tools Applications in Audit Profession: The CPA’s Perspective

Purpose: The purpose of this research is to investigate the extent of the application of information technology tools in the field of auditing in Jordan. Specifically, the study aims to determine the importance and the degree of use of information technology in audit control, planning, and documentation. Theoretical Framework: The theoretical framework of this research revolves around the utilization of information technology in auditing. It seeks to understand how information technology tools are perceived and utilized by auditors in Jordan and how these tools impact audit control, planning, and documentation processes. Findings: Based on the survey of 60 auditors in Jordan, the research found the following key findings: There is a significant awareness (72.60%) among auditors about the importance of using IT tools in auditing. The use of audit applications and the perceived importance of these tools varied significantly among auditors. The degree of using information technology in planning and control tasks was reported to be at 72.13%. The application of information technology tools in documenting and recording audit work reached 78.04%. The perception of auditors regarding planning and controlling tasks assisted by IT tools is not affected by their experience. Implications of the Research: The findings of this research have several implications for the field of auditing in Jordan: The awareness of the importance of IT tools in auditing indicates the potential for further integration of technology in the profession. The variation in the use and perceived importance of audit applications calls for a deeper understanding of the factors influencing these differences. Originality and Value: The originality and value of this research lie in its focus on the application of information technology in auditing in the specific context of Jordan. As of the study's date, it provides up-to-date insights into the extent of IT adoption and its impact on audit control, planning, and documentation. The research contributes to the existing body of knowledge by shedding light on the specific challenges and opportunities faced by auditors in Jordan regarding IT adoption.