Qualified Audit Reports Research Articles

Promotion of good governance within local government: a case of municipal public accounts committee in South Africa

The aim of this article was to explore the role of Municipal Public Accounts Committee (MPAC) in promoting good governance, with the contextual setting being Blouberg Local Municipality. There is general consensus among academics, practitioners and policy makers alike in South Africa that the allocation of functions and responsibilities of municipal council and that of executives are often not clear, thus creating confusion in the officialdom and weakening oversight structures including MPAC. Hence the qualified audit reports in four consecutive years in Blouberg Municipality (see Auditor General, 2016-2021), signals internal failure not only to improve the municipal financial health status but to promote good governance generally. Methodologically, the study adopted qualitative designs and used interviews as instrument to collect data from key members of the committee. Consequently, the study revealed many underlying weaknesses, but the critical one was the demonstrable poor capacity within the committee which is twofold; (1) lack of expertise to facilitate oversight and (2) insufficient budget to enable performance of the Committee. Essentially, these challenges affect the proper functioning of MPAC which is constitutionally bestowed the responsibility of holding the executive accountable and guard against any misappropriation of municipal funds. The study recommended a number of solutions to improve the state of MPAC in the municipality, amongst them were that, council should develop an integrated reporting mechanism framework to conduct an oversight role which can be done with the assistance from experts in governance. The committee’s programme of action must also be funded, sufficiently.

Benefits and Challenges of Digital Audit Implementation in the Malaysian Public Sector: Evidence from the Accountant General's Department of Malaysia

Purpose: The current study aims to investigate the important benefits or advantages of digital audit implementation perceived by the internal auditors of the Accountant General’s Department of Malaysia (AGD), and examine the significant challenges faced by the AGD auditors in implementing digital audit. Design/ Methodology/ Approach: A focus group discussion was conducted with AGD officers involved in digital audit implementation and a questionnaire survey was distributed to the AGD auditors to achieve the research objectives. All 124 auditors responded and returned the completed questionnaire. Thematic analysis was performed on the transcription of the focus group discussion while descriptive statistics of mean scores, standard deviations, and mean score ranking were utilised to analyse the questionnaire data. Findings: The top five ranked benefits of digital audit implementation perceived by the respondents were improving the quality of audit report, increasing the efficiency of audit, assisting auditors in identifying material misstatements, improving the quality of the audit processes and enhancing audit effectiveness. The top three challenges were requiring additional education and training to acquire the necessary digital skills, high implementation costs and the risk of data security (leakage) and confidentiality. Originality/ Value: The present study contributes to the existing limited empirical evidence on the fundamental advantages and challenges of digital audit implementation despite various conceptual discussions on the two implementation aspects.

The Effect of Audit Committee Expertise on Audit Quality: Empirical Evidence from Bangladesh

The purpose of this study is to examine the effects of diverse expertise types on audit quality, providing valuable insights for corporate governance and enhancing the audit process. This research uses 651 firm-year observations for 2001-2021 year. This research applies Breusch-Pagan LM, Pesaran Scaled LM, Bias-corrected Scaled LM, and Pesaran CSD test to check the cross-sectional dependency of the series. The study uses second generation panel unit root tests to check the stationary of the variables. After applying the panel cointegration test, this study uses the long run estimation model and robustness checking to examine the relationship. The findings reveal that financial, accounting, and non-accounting expertise all positively and significantly affect audit quality, suggesting that audit committees with diverse expertise can effectively enhance the audit process. This study finds single causal indicating that audit committee expertise improves audit quality. This study emphasizes the importance of incorporating experts from various backgrounds on audit committees to improve audit quality and increase stakeholder confidence in financial statements. This study implies that companies must focus on the expertise on the audit committee during the appointment of the members to maintain the quality of audit reports. This research is unique to the existing literature on audit committee expertise and audit quality by examining the influence of accounting and non-accounting expertise types in Bangladesh context and providing empirical evidence in support of the agency theory.

Influence of Audit Committee Independence on the Quality of Audit Reports of Sacco’s in Homabay County, Kenya

Every operating organization keeps tabs on its development by producing accurate financial statements at the conclusion of each fiscal year, which are subsequently distributed to various individual users who are concerned with the organization's development. The accuracy of the financial accounts is then verified by an audit procedure, which is sealed by a transparent audit report provided to the specific business by the audit committee. The main objective of this study was to examine the influence of audit committee independence on the quality of audit reports of Sacco’s in Homabay County, Kenya. This was supported by the fact that there are numerous Sacco’s in Homabay County, many of which had apparently experienced audit problems in the past. Stakeholders’ theory served as the study's compass. This study adopted a descriptive causal research design, the target population was 104 audit committee members of deposit taking Sacco’s in Homabay County as at December 2021. Out of the target population determined using the Krejcie and Morgan formula, 82 members of the audit committee provided responses for the study. Primary data was collected using research questionnaire which involved drop and pick method. Descriptive statistics including a frequency table, mean, and standard deviation were used for data analysis while inferential statistics included Pearson’s correlation analysis. The study found that audit committee independence in Homabay County, Kenya, had a positive and significant impact on the caliber of audit reports on Sacco’s (r=0.530, p<0.05). The study recommends that Sacco’s audit committee members should be as independent as possible in executing their mandate so as to ensure audit reports provided are of quality.

Effect of Audit Quality on Financial Performance of Quoted Conglomerates in Nigeria

This study was embarked on to ascertain the effect of audit quality on financial performance of quoted conglomerates in Nigeria. The study specifically investigates the effect of audit size, fee and tenure on return on asset of selected conglomerates in Nigeria. Purposive sampling technique was used to select the conglomerates in the study. The study involves a time series data between 2011-2021 involving 12 years. Data was excerpted from their financial summaries. The study adopted Ordinary least square regression technique, and also applied econometric estimations such as Augmented Dickey Fuller (ADF) and Johanson Cointegration tests. The study therefore concludes that audit tenure affects a propensity to disclose key audit matters. However, audit size and fee are not strong drivers of financial performance. The Study recommends that organisations should ensure credibility and transparency in audit; this will enhance the quality of audit report. There must be willingness of management to communicate with the auditor while also enlarging the audit size to improve audit reports and minimize the adverse impact on the company, the management should make the auditor more aware of the intended disclosure and the company’s position and communicate with the auditor more actively.

Audit Quality dan Value Relevance of Accounting Information

Users of financial reports need relevant information as a basis for making decisions. The existence of an auditor helps investors in assessing the quality of accounting information. The research aims to examine the quality of audit reports as proxied by the size of the public accounting firm and audit opinions on the value relevance of accounting information. The research population is all sectors of business entities registered on the IDX in the 2018-2021 period. A total of 1,480 observations were used as samples in the research. Researchers use a fixed effect model in a panel data structure to test hypotheses. The research results show that auditor size increases the relevance of earnings value, but reduces the relevance of book value. Meanwhile, the audit opinion was found not to affect the relevance of accounting information. The research findings are interesting because audit opinions provided by Big 4 auditors increase the relevance of book value. This research is expected to help investors consider audit quality as an integral part of fundamental analysis, as well as contribute to the development of the topic of value relevance of accounting information and audit quality.
 Keywords: Audit, Financial Statement, Value Relevance

The Influence of Audit Fee, Audit Tenure, and Auditor Competency on Audit Quality: A Systematic Review

Financial audit reports play a crucial role in corporate decision-making, and their quality is impacted by various factors such as audit fees, audit tenure, and auditor competency. Audit fees refer to the costs associated with audit services, audit tenure signifies the duration of the audit firm's responsibility, and auditor competency encompasses the auditor's knowledge, skills, and attitudes. This study employs a systematic review approach, analyzing articles downloaded from the Google Scholar online database covering journals published from 2019 to 2023 using keywords like audit fee, audit tenure, auditor competency, and quality of financial audit reports. The research incorporates 10 quantitative journals, with 5 employing linear regression analysis, 4 using logistic regression analysis, and 1 utilizing the partial least squares method. The findings reveal that a majority of the journals demonstrate a positive and significant correlation between audit fees, audit tenure, auditor competency, and the quality of audit reports. Nonetheless, a few articles assert the absence of a relationship between audit fees, audit tenure, and audit quality. In summary, public accounting firms should regularly assess and formulate strategies concerning audit fees, audit tenure, and auditor competency to enhance client value by producing high-quality, accurate, and dependable financial audit reports.

The Effect of Independence, Professionalism, Competency and Auditor’s Experience on the Quality of Audit Report (Empirical Study at BPK Perwakilan Provinsi Sulawesi Utara)

This study aims to determine the effect of independence, professionalism, competency and auditor’s experience on the quality of audit report. This study using a survey with census method using questionnaires distributed to all auditors in BPK Perwakilan Provinsi Sulawesi Utara. There were 138 questionnaires distributed around June until July 2023, but only 125 questionnaires returned so that response rate was 90,58%. The research model used is the multiple linear regression. The results show that professionalism, competency and auditor’s experience have a positive and significant effect on the quality of audit report, while independence has no significant effect. The implication of these findings show that the increase of professionalism, competency and auditor’s experience improve the quality of audit report. Coefficient of determination shows that independence, professionalism, competency and auditor’s experience simultaneously influence the dependent variable (the quality of audit report) by 68,50%, while the remaining 31,5% is influenced by other factors.

Influence of Audit Committee Meetings on the Quality of Audit Reports of Saccos in Homabay County, Kenya

Every operating organization keeps tabs on its development by producing accurate financial statements at the conclusion of each fiscal year, which are subsequently distributed to various individual users who are concerned with the organization's development. The audit procedure then confirms the accuracy of the financial accounts, and the audit committee then provides the specific business with a transparent audit report to seal the deal. The main objective of this study was to examine the influence of audit committee meetings on the quality of audit reports at Sacco’s in Homabay County, Kenya. This was supported by the fact that there are numerous Sacco’s in Homabay County, many of which had apparently experienced audit problems in the past. The institutional theory served as the study's compass. This study adopted a descriptive causal research design; the target population was 104 audit committee members of deposit taking Sacco’s in Homabay County as of December 2021. Out of the target population determined using the Krejcie and Morgan formula, 82 members of the audit committee provided responses for the study. Primary data was collected using a research questionnaire that involved the drop-and-pick method. Descriptive statistics, including a frequency table, mean, and standard deviation, were used for data analysis, while inferential statistics included Pearson’s correlation analysis. The study found that audit committee meetings in Homabay County, Kenya, had a positive and significant impact on the caliber of audit reports on Sacco’s (r = 0.568, p<0.05). The study recommends that Sacco’s audit committee members should conduct the maximum number of meetings as much as they can. In extension, those meetings should be objectively aimed at attaining quality audits.

A Review of Graduate Attributes in the Oman Authority for Academic Accreditation and Quality Assurance of Education (OAAAQAE’s) Quality Audit Reports

With the growing importance of the development of graduate attributes (GAs) in higher education, higher education institutions (HEIs) are emphasizing which GAs their graduates attain as part of their mission, vision, and core values, and are required to describe and document how their programs contribute to the development and promotion of those attributes. Qualitative data were collected from 12 quality audit reports from the Oman Authority for Academic Accreditation and Quality Assurance of Education (OAAAQA). This paper identifies the OAAAQA’s key areas of interest and their importance in ensuring quality in college-preparedness programs, as well as making recommendations for future audits. The paper seeks to: (1) highlight the most salient issues that have been raised in their reports regarding GAs and (2) make some suggestions so that HEIs in Oman can establish and implement GAs more effectively to meet both the OAAAQA’s expectations and good international practices. Following a data-driven systematic qualitative content analysis (QCA) of the QA reports, four main categories emerged regarding the GAs. Student learning objectives should be aligned with GA development, while stakeholders’ awareness of these attributes should be raised. Additionally, there is a need for an appropriate evaluation mechanism for GAs to be conducted in a systematic and timely manner. Moreover, GAs should be explicitly assessed and benchmarked based on the feedback obtained from relevant stakeholders. Finally, both internal and external stakeholders should be involved in the GA development and review process.

Kompleksitas Tugas, Audit Fee, dan Kualitas Audit: Moderasi Diskriminasi Harga

Purpose: This study aims to examine the effect of task complexity and audit fees on audit quality and examine the moderating effect of price discrimination based on KAP's reputation on this relationship.Method: This study used Structural Equation Modeling (SEM) analysis of 117 questionnaires obtained from a survey conducted on auditors at PAF in DKI Jakarta.Results: The results of this study indicate that task complexity has a negative effect on audit quality. Price discrimination weaken the effect of task complexity on audit quality. Meanwhile, audit fees have no effect on audit quality. There is a direct effect of price discrimination on audit quality.Implications: This study result have implications for the compliance theory implementation. Audit complexity and audit fees can motivate auditors to produce good quality audit reports because auditors must be professional and comply with the code of ethics.Novelty: This study adds moderation of price discrimination based on KAP's reputation which is rarely researched in Indonesia. This study provides input for policy formulation for equal opportunity for local KAPs to acquire clients so as to minimize price discrimination based on KAP reputation.

The Role of Computerized Accounting Advanced Information Systems in The Efficiency and Effectiveness of Internal Audit

This study aims to investigate the role played by information systems in enhancing the external audit procedures of financial institutions. Presumably, these systems can help improve the quality of audit reports by allowing financial professionals to access and analyze financial information. An online survey using a questionnaire prepared by the researcher was used to collect data for the study. The data was analyzed using statistical analytics software. SPSS24 The results of the study revealed that the availability of appropriate audit information systems (AIS) led to a significant improvement in certain aspects of the quality of the external auditor. According to external auditors, the important function of these systems in improving the quality of procedures is recognized by them. The results show how an automated identification system can help improve the external audit performance of Iraqi SMEs. It also shows that the various applications and elements of an automated identification system can significantly enhance the quality of the procedures used by these companies. These include planning and executing audits, risk assessments, and the use of computer software components. The importance of this study is due to the increasing number of changes in the way internal audit procedures are conducted, such as the use of computerized software. There has been a lack of studies on the role of accounting information systems (AIS) in this process.

PENGARUH ROTASI AUDITOR, UKURAN PERUSAHAAN, DAN PERGANTIAN MANAJEMEN TERHADAP KUALITAS AUDIT SEKTOR PERTANIAN 2019-2021

The quality of audit report in financial statements are the key points for the user of the financial statement to make a decision. This research has a purpose in examining what effect will be given from auditor switching, firm size, and management change to the quality of an audit. The population of this research is from the company with agriculture sector listed at Indonesia Stock Exchange from 2019-2021. Using logistic regression in analysing the data with the using of SPSS version 26. The results are : 1) Auditor switching has no significant effect on audit quality. 2) Firm size has a significant effect on audit quality. 3) Management change has no significant effect on audit quality.Keywords : Auditor, Management, Audit Quality, Firm Size,

The Effect of Social Capital on Auditor’s Performance

This paper investigates the relationship between social capital and auditor’s performance in Iranian listed firms. The sample included 128 firms on the Tehran Stock Exchange from 2014 to 2020. The research method was descriptive-correlational, and the relationship between research variables was explained using regression models based on the panel data. The results illustrated that social capital positively correlates with auditor performance and Audit report quality. In other words, social capital decreases audit opinion shopping, audit expectation gap, internal control weakness, and audit report lag. Therefore, society’s influential assets, social capital, and audit report quality strongly influence the auditor’s performance. The auditor’s performance affects the probability of discovery and reporting material errors and misstatements. Therefore, recognizing influential factors on auditors’ performance can improve the quality of audit reports.

Evaluation of Internal Audit and Control System as a Prerequisite for Qualitative External Audit Report

The quality of the audit report in corporate organization around the world and Nigeria has been of great concern considering the contribution of internal auditors as the overseer of daily accounting entries in an organization. Considering this issue, the study focused on evaluation of internal audit and control system as a prerequisite for the qualitative external audit report. Survey research design was adopted in the conduct of the study. The population of the study includes 93 internal and external auditors randomly selected amongst organizations in Nigeria. Three research questions and three hypotheses, all stated in its null form guided the study. Questionnaire instrument was adopted in the conduct of the study, which was rated on a five point scale with an acceptable rating of 3. Hypotheses that guided the study was tested using one sample test statistics at .05 level of significance. Findings from the study shows that, internal auditors in corporate organizations are not significantly independent in the discharge of their duties. It was also discovered that internal audit and control system of corporate organizations in Nigeria are significantly relied on as audit evidence/basis for financial report. Final findings showed that, internal audit and control systems do not significantly aid qualitative external audit report of corporate organizations in Nigeria. The findings imply that the quality of the external audit report is determined by the quality of its internal audit and control team. Based on this, the researcher recommends amongst others that, regulation and training should be provided to enhancing independence of internal auditors and that external auditors should endeavor to carryout more comprehensive sampling during audit exercise.

Skolinspektionens konstruktion av skolan som realiseringsarena

School inspection is a re-formulation of education as a realization of the school policy. When the Swedish Schools Inspectorate assesses schools’, they in practice formulate a new policy. By using the concept of a realization arena and analyzing quality audit reports, I intend to study how the Swedish Schools Inspectorate constructs its audit object and its consequences. In this study I assume a discursive approach. In the Inspectorate’s construction, the student is only expected to receive the stipulated knowledge and consume teaching. It is the teacher’s job to sell and adapt the presentation of the material to the students.

Determinants Of The Quality Of Audit Services Moderated By The Auditor's Professional Ethics In The Public Accounting Office Of The South Jakarta Region

The COVID-19 pandemic affected audit quality due to various policies implemented by the government itself to deal with the pandemic, such as social distancing, work from home and even lockdowns which made it difficult for auditors to verify the findings they obtained during the audit. auditors who cannot perform audit procedures in accordance with applicable auditing standards, the auditors cannot issue quality audit reports and provide opinions that are not in accordance with the audit standard code of ethics, meaning that they do not apply professional audit ethics so that the auditor does not have the competence, professionalism and may not have the ability to manage information technology. This research is a quantitative research with primary data. The data collection technique used a questionnaire that was distributed to respondents to auditors working at KAP with active status in the South Jakarta area, with a total sample of 97 auditors. The results showed that the application of information technology, competence, and professionalism had a significant effect on the quality of audit services. As well as professional ethics of auditors is able to strengthen the relationship between the application of information technology, competence, and professionalism to the quality of audit services

Audit Firm Attributes and External Auditors’ Switching Behaviour of Insurance Companies in Nigeria

Auditor replacement has been a critical issue in research to be solved in order to enhance the quality of audit reports. This study investigated the nexus between audit firm characteristics and external auditors’ switching behaviour of insurance companies in Nigeria. The specific objectives include the relationship between audit delay, audit tenure, audit fees, audit client size and audit firm size on audit switching. The study employed ex post facto and correlational research designs with a population of forty-seven (47) insurance companies. The study used the Taro Yamene formula to determine the sample size of forty-two (42) insurance companies and data was collected from the financial reports of sampled companies. The secondary data obtained from the annual reports were analysed using univariate, bivariate and multivariate analysis. The multiple regression analysis revealed that audit delay negatively and significantly impacts on audit switching of listed insurance companies in Nigeria; audit tenure negatively and significantly impacts on audit switching of listed insurance companies in Nigeria; audit fees positively and significantly impact on audit switching of listed insurance companies in Nigeria; audit client size negatively and insignificantly impact on audit switching of listed insurance companies in Nigeria; audit firm size positively and significantly influence external auditor switching of listed in insurance firms in Nigeria. On the basis of the findings, the study concluded that audit firm characteristics influence the level of external auditor switching of listed insurance companies in Nigeria. Hence, the study recommended amongst others, that companies should conduct proper short and long term effects of audit delay, audit tenure, audit fees, audit client size and audit firm size on external auditors replacement before selection and engagement of new auditor because each wrong decision might affect audit quality. The implication of this study was to improve the research on the relevance of external auditors’ switching because of the decision of the firms in defining audit firm services and audit quality.

PENGARUH SKEPTISISME PROFESIONAL DAN KEAHLIAN AUDIT TERHADAP KUALITAS HASIL AUDIT (STUDI PADA INSPEKTORAT ACEH)

The purpose of this study examines the effect of professional skepticism and audit expertise on the quality of audit results at the Aceh Inspectorate. Collecting data using a structured questionnaire with a Likert scale. A total of 53 questionnaires were distributed to all auditors at the Aceh Inspectorate. Saturation sampling was used to determine the research sample. The data analysis technique uses multiple linear regression analysis (multiple linear regression). The result shows that professional skepticism and audit expertise have effects on the quality of audit results at the Aceh Inspectorate. Professional skepticism has a positive effect on the quality of audit results, professional skepticism reduces the level of auditor error in conducting audits. Furthermore, audit expertise has a positive effect on the quality of audit results. This research is only limited in scope, especially limitations in sampling and research objects. Limitations need to be considered in further research, namely a more representative research method approach such as taking samples from various parties. Furthermore, this research contributes to the model of testing the quality of audit results through the relationship of professional skepticism and audit expertise with the quality of audit results, while also expanding the discussion on strategies for obtaining quality audit reports at the Aceh Inspectorate.

Audit Evidence Gathering and Audit Quality Theory: Implications for Auditors' Opinion during COVID-19 Era

Audit Evidence gathering has a direct effect on the quality of audit reports through the expression of audit opinions by audit firms. De–Angel (1981) believes that the bigger the audit firm, the more the capacity to deploy advanced technology, infrastructure, and qualified human resources in carrying out audit services and the higher the audit quality. This paper explored the effects of audit evidence gathering during the COVID-19 pandemic on audit opinion and audit quality due to changes in work patterns by audit firms in carrying out audit assignments remotely. This paper used a purposive sampling technique with the use of a questionnaire by administering 276 practicing accountants in Lagos who are experienced in audit evidence gathering and know how the COVID-19 pandemic has affected the quality of audits and expression of opinion. The study found out from the inferential statistics Adjusted R Square showed enough evidence against the Null Hypothesis and concluded that audit evidence-gathering techniques have a significant positive effect on qualifying audit opinions, Non-qualifying audit opinions, Disclaimers audit opinions, and Stakeholders' expectation gap. The study also found the scarcity of literature in this area due to the recency of the issue, and further research is recommended to be extensively done in the future.