Audit Quality Research Articles

Enhancing Project Performance Through Quality (Toyyib) Dimensions: An Empirical Study in Jordan's Construction Industry

This study investigates the impact of key project quality (Toyyib) dimensions—Feasibility, Conformity, Durability, and Serviceability on project performance within Jordan's construction industry. Drawing from existing literature, the study highlights the critical link between quality management practices and enhanced project outcomes. Utilizing a quantitative research methodology and Structural Equation Modeling (SEM), data collected from 204 managers within Jordan’s construction firms reveal a significant positive relationship between effective quality management and improved project performance. The findings underscore the importance of comprehensive quality audits and robust quality control mechanisms in minimizing delays, reducing costs, and achieving project objectives. This research contributes to both theoretical perspectives and practical applications in construction management, advocating for the integration of systematic quality dimensions to drive competitive advantage and sustainable project success.

Media coverage as a moderator in the nexus between audit quality and ESG performance: Evidence from China.

In response to growing pressure on companies to manage and improve their reputation regarding environmental, social, and governance (ESG) issues, the audit is regarded as a vital resource for ensuring ESG risk management, improving transparency, mitigating opportunistic constraints, and guaranteeing accurate reporting. The objective of this paper was to investigate the role of audit quality in improving ESG performance, as well as to examine the role of media coverage represented by ESG controversy score in moderating these relationships. We analyzed 303 Chinese companies with 2,121 observations covering the period from 2017 to 2023. The results suggest that the effects of audit quality as measured by the Big 4 and audit fee on improving ESG performance are positive but not significant. On the other hand, the results reveal that media coverage serves as a positive, albeit non-significant, moderating variable between audit quality measured by the Big 4 and ESG performance, while it has a significant negative effect when audit quality is evaluated based on audit fees. The results indicate that improving ESG performance is significantly linked to auditors intensifying their practices and implementing their work more stringently. More importantly, media coverage is an important additional driver and economic incentive that encourages companies to steer clear of poor ESG-related practices.

The Effect of Audit Quality and Financial Performance on Audit Delay (Empirical Study on LQ45 Companies in 2021-2023)

The financial report is an information medium that is very useful for stakeholders. The financial statements owned by the company can be used for stakeholders to make decisions. Financial statements presented by companies must be audited because audited financial statements can increase the confidence of financial statement users. One of the important factors in financial statements is timeliness. Financial statements can be very useful if financial statements are presented on time, therefore the financial statements presented must be timely so that decision-making can also be taken appropriately. The purpose of this study is to see what factors can affect audit delays. Audit delay is the time difference between the closing date of the book and the date of signing the auditor's report. The sample in this study is companies with the LQ45 index, because LQ45 index companies are companies that have a healthy financial condition. Data will be taken from the Indonesia Stock Exchange website for 3 years. Data analysis will be carried out using SPSS by performing the Classical Assumption Test and the Multiple Linear Regression Test. The targeted output is journal publication in accredited national journals. Keywords: Audit Delay, Profitability, Leverage, Audit Quality

Assessment of cervical spine CT by an image quality audit using qualitative and quantitative methods.

To study the feasibility and assess the correlation of qualitative and quantitative methods for an image quality (IQ) audit of a Cervical spine CT. Five radiologists retrospectively performed a blinded visual grading analysis (VGA) on 20 studies (10 from Protocol 1 and 10 from Protocol 2), using the RANZCR CT IQ Self-Audit worksheet. A Visual Grading Analysis Score (VGAS) and Area under the curve using Visual Grading Characteristics (AUCVGC) were the figures of merit. Quantitative metrics for noise and contrast were correlated to the qualitative assessment. No statistically significant difference was observed in the IQ, VGASProtocol1 = 0.65, 95% CI [0.54, 0.75] and VGASProtocol 2 = 0.73, 95% CI [0.67, 0.79] and AUCVGC = 0.548, 95% CI [0.40, 0.69]. Protocol 2 indicated a statistically significant average dose reduction of 35% in CTDIvol (P = 0.020) and a higher noise; however, the difference was statistically insignificant. There was a moderate correlation between the manual noise measurements in soft tissue and air (P = 0.035) and a strong correlation between the manual and automated noise measurements (P < 0.001). The contrast resolution-based quantitative parameter, EdgeGradientSoft, correlated to the qualitative scores (P = 0.031). Validated VGA tools can be used for IQ audits; however, tailoring the image criteria and rating scale to the clinical practice is suggested. The use of contrast-based IQ metrics showed encouraging results, and further larger-scale studies are needed to explore their potential use in quality management.

Internal audit quality and accounting information comparability: Evidence from China.

This study employs the impact and mechanism of internal audit quality on the comparability of corporate accounting information. Using manually collected internal audit data, the study focuses on non-financial listed companies of A-share market spanning from 2007 to 2022 in China. The findings are as follows: (1) Internal audit significantly enhances the comparability of accounting information, the higher the quality of internal audit, the more pronounced its contribution. This conclusion remains robust after conducting endogeneity tests. (2) Mechanism testing reveals that internal audit enhances accounting information comparability through two channels: mitigating agency costs and improving financial information transparency. (3) Moderation effect test proves that the quality of internal control and the high-tech industry will strengthen the positive relationship between internal audit and comparability of accounting information, while the degree of industry competition and the level of capital occupation by major shareholders will weaken the positive relationship.

The relationship between audit committees, external auditors, and internal control systems: a literature review and a research agenda

Purpose This paper aims to focus on the relationship between audit committees, external auditors and internal control systems (ICS) and strives to point out mutual influences between the instances to provide an integrated perspective for firms’ multilateral monitoring mechanisms. Furthermore, this study emphasizes the incorporation of sustainability and fraud considerations into the traditional roles of audit committees and auditors. Design/methodology/approach This structured literature review is based on 71 empirical-quantitative studies published in high-quality journals between 2005 and 2022. Considering the classification of ICS into ICS quality and internal audit function, the studies are analyzed with regard to audit committees’ and external auditors’ characteristics, divided into incentives and competencies, as well as their mutual relationships. Findings This study highlights a dynamic trilateral network of relationships between monitoring authorities and primarily shows that audit committees equipped with adequate competencies generate a substitutive effect for external auditors by reducing their efforts, whereas ICS quality serves as a possible mediator in this network of relationships. The establishment of an integrative three-party coalition of competent and adequately incentivized monitoring parties is essential to guarantee sufficient and appropriate ICS and overall corporate governance quality. Practical implications The findings should prompt legislators and firms to ensure a deeper collaboration between audit committees, internal auditors and external auditors to generate synergy effects and economies of scale within the integrative monitoring process. Legislators should develop stricter requirements for competencies of audit committees and auditors. These should include a holistic triad of sustainability, fraud and digital expertise as well as mandatory forensic procedures performed by all monitoring bodies. Originality/value The authors contribute to prior research by highlighting the importance of an integrative three-party coalition of monitoring authorities to ensure corporate governance quality and to generate synergy effects within a dynamic multilateral monitoring process. Furthermore, the authors offer cutting-edge implications by stressing the need for consideration of sustainability and fraud aspects in the traditional work and profiles of audit committees and auditors.

The Influence of External Audit Quality on Discretionary Accruals and Real Earnings Management Practices: An Analysis of Malaysian Firms

This paper aims to analyse the mitigating effects of external audit quality (EAQ) factors on earnings management (EM) practices. Data were collected from firms listed on Bursa Malaysia’s main market, covering the years 2011 through 2022. Panel regression was employed to analyse the data. The findings of this study confirmed a significant negative association between audit reputation, audit quality, audit opinions, and EM of listed firms in Malaysia. Audit fees and audit tenure were found to be not significant in relation to EM. The study included five control variables in the analysis, and only economic value added (EVA) was found to be significant. The findings suggest that a number of audit quality factors are indicative of EM among listed firms. The authors extend, as well as contribute to, the growing literature on the EAQ, and therefore, wider corporate governance literature. Thus, it provides originality by presenting empirical evidence and outcomes to fully understand how discretionary accrual and real EM affect EAQ in the Malaysian context. Therefore, stakeholders should place higher concern on the selection of an external auditor, and investors should take into account the external audit factors when making investment decisions. Measuring the effectiveness of EAQ allows decision-makers to evaluate how effective employed governance measures are in improving shareholders’ perceptions of financial information quality and mitigating EM practices.

Determinants of Integrity of Financial Statements in Indonesia

The importance of integrity of financial statements is to assist the stakeholders and investors make improved assessments and decisions. Financial statements are presented according to the standards of accounting. Therefore, this research aims to investigate the influence of corporate governance, internal control system and company size on integrity of financial statements, as well as to prove the inconsistently findings from the prior studies. In this research, the corporate governance is proxied by independent commissioners and audit quality. The population used in this research is all state-owned enterprises listed on Indonesia Stock Exchange period 2019-2021. Purposive sampling technique was used, resulting a grand total of 108 observations. Using the multiple linear regression by SPSS 25 version, the results of this research reveal that internal control system and firm size have positive and significant influences on the integrity of financial statements while independent commissioners and audit quality do not have any significant influences on the integrity of financial statements.

Legal Liability, Institutional Environment and Audit Pricing: Insights from China’s Securities Law Revision

This study investigates the impact of China's revised Securities Law (2019) on the audit pricing strategies of A-share listed companies. Using a Difference-in-Differences (DID) approach and a sample of 26,057 firm-year observations from 2016 to 2022, we find that the new law led to a significant increase in audit fees, especially for non-state-owned enterprises and firms in regions with stronger legal institutions. We attribute these effects to the heightened legal liability and regulatory scrutiny faced by auditors under the new regime, which incentivizes them to enhance audit quality and charge higher risk premiums. Our results are robust to a series of sensitivity tests and alternative specifications. We conclude that the revised Securities Law has achieved its intended objectives of improving market transparency and investor protection but at the cost of higher compliance burdens for listed companies. Our findings have important implications for policymakers, regulators, and market participants in China and other emerging economies undergoing similar legal and institutional reforms.

The Role of Technological Readiness in Enhancing the Quality of Audit Work: Evidence from an Emerging Market

This study examines the impact of remote audit quality (RAQ) on the quality of audit work (QAW). Further, it explores the moderating effect of both client technological readiness (CLTR) and auditor technology readiness (ADTR) on the link between RAQ and QAW. Data were collected through a questionnaire survey distributed to all external auditors working in Egypt. The final sample consists of 280 auditors. The data were analyzed with smart partial least squares (Smart-PLS) software. The results showed that RAQ has a positive and significant impact on QAW. Moreover, the results revealed that CLTR and ADTR moderate the relationship between RAQ and QAW. CLTR was found to have a positive moderating role, as CLTR was found to strengthen the relationship between RAQ and QAW, while ADTR was found to have a negative moderating role, as ADTR was found to weaken the relationship between RAQ and QAW. The findings can provide a pivotal yardstick for guiding companies, auditing firms, auditing professional bodies, and regulators in the Egyptian context. Positioned as one of the early studies to concentrate on the moderating role of CLTR and ADTR in the relationship between RAQ and QAW, this research suggests insights within an emerging market context.

Impact of auditor characteristics on audit quality during COVID-19: Evidence from Saudi Arabia

This study aimed to analyze the impact of auditor characteristics on audit quality in Saudi Arabia during the COVID-19 pandemic by assessing how auditor characteristics (such as gender, age, education level, professional certificate, sector, size of the employees, revenue, experience, and region) impact audit quality in crisis conditions. It employed a descriptive-analytical approach and quantitative regression analysis of cross-sectional data. The survey was conducted in 2021 among 203 auditors in Saudi Arabia. Data collection was facilitated through the assistance of the Saudi Organization for Chartered and Professional Accountants (SOCPA) to make the sample more structured and representative. The results reveal that auditor characteristics played a significant role in determining audit quality during the pandemic. Gender, education level, audit firm size, and professionalism experience showed a strong correlation (r = 0.619) between professional experience and adaptability to remote auditing conditions. The regression analysis indicates a positive impact on audit performance. The results suggest practical implications for improving auditor selection, training programs, and regulatory frameworks to enhance audit resilience in times of crisis. It offers theoretical contribution by validating existing models under pandemic conditions and providing insights for the future of auditing practices. It also assists in establishing confidence in financial reporting together with control, making investors feel secure, and maintaining stability in the business world.

Pengaruh Firm Size, Audit Fee, Audit Tenure, Kompetensi dan Independensi Auditor Terhadap Kualitas Audit pada Perusahaan Perbankan yang Terdaftar di Bursa Pengaruh Indonesia 2018-2022

This research aims to determine the influence of firm size, audit fees, audit tenure, auditor competency and independence on audit quality in banking companies listed on the Indonesia Stock Exchange for the 2018-2022 period. This research population used a purposive sampling technique to obtain a sample of 150 data from 30 companies, but data transformation and outliers were applied so that the sample size became 120 data. The data analysis applied in this research is classical assumption testing, multiple linear regression analysis, and hypothesis testing. The research results show that simultaneously there is an influence of the variables firm size, audit fee, audit tenure, competence and independence of the auditor on audit quality, but partially the variables of competence and independence of the auditor do not have a significant effect on the quality of audits in banking companies listed on the Indonesia Stock Exchange for the period 2018-2022.

Promoting audit transparency in higher education through an internal academic quality audit application

This study aims to design and develop a web-based application for Internal Quality Audit at Universitas Ibnu Sina, replacing the conventional audit process which is currently in use. The previous manual audit process resulted in inefficiencies and increased the risk of errors. Key challenges identified include limitations in human resources, time, and funding, as well as the low effectiveness of the audit process. In order to address these issues, the proposed information system facilitates the distribution of online checklists and document uploads, thereby expediting the verification and reporting audit results. This research adopts the System Development Life Cycle (SDLC) approach in its development, utilizing methods that include use case diagrams, activity diagrams, sequence diagrams, and database design. These methods enhance interaction and workflow within the audit team. Testing results indicate that the system functions to the expected specifications. Furthermore, this study demonstrates that implementing a web-based system can accelerate reporting, improve the structure and documentation of audits, and support efforts to enhance academic quality at the university. Implementing this system is expected to increase efficiency and accuracy in the academic quality audit process at Universitas Ibnu Sina.

Enhancing Financial Reporting Quality: The Influence of Audit Committee Attributes and the Role of Audit Quality

This study to analyze the influence of the positive Characteristics of the audit committee consisting of an independent audit committee, knowledge accountancy audit committee, number meeting audit committee, and size audit committee on quality reporting finance. Besides that For analyzing audit quality strengthening moderation between characteristics of the audit committee with quality reporting finance. Research This uses agency theory which emphasizes the conflict of interest between the principal and agent. Research This is a study associative with using secondary data from the Indonesia Stock Exchange (BEI) or via the company website of each sample. The sample collection technique sample uses method purposive sampling. Sample in study This is all over incoming companies The LQ 45 index is listed on the Indonesia Stock Exchange (IDX) with a total sample of 120 observations. For the test, the hypothesis used MRA analysis with the use of application data. The results of the research include the independent audit committee, knowledgeaccountancy audit committee, number meeting audit committee, and the number of influential audit committees for quality reporting finance. Companies that use Big Four auditors can strengthen the connection between the independent audit committee and knowledge accountancy audit committee on quality reporting finance whereas companies that use Big 4 auditors weaken the connection amount meeting audit committee and the amount audit committee on quality reporting finance.

The Implementation of the KAM Reforms in Saudi Arabia: Stakeholder Perspectives on the Audit Expectations Gap

ABSTRACTThis exploratory study investigates the implementation of key audit matters (KAM) in audit reports under ISA701 to better understand how KAM disclosures may help narrow the audit expectations gap. The study draws on findings from semi‐structured interviews with 28 professional stakeholders from the Kingdom of Saudi Arabia (KSA). The study's aim was to explore the relationship between KAM disclosures and the audit expectations gap considering audit quality concerns. Our findings reveal that (i) financial statement users report that they better understand what the auditor does, which enhanced their confidence in the audit process; and (ii) at least some financial statement users report that KAM disclosures provide new information about companies' risks that management was not already providing. We further report that many interviewees (particularly Big Four external auditors) indicated that the KAM reforms did not enhance audit quality in KSA. Interestingly, a small number of non‐Big Four auditors believed that KAM disclosures have enhanced audit quality. The key message is that the KAM reforms did not necessarily improve audit quality but that they are perceived to have played a role in further narrowing the audit expectations gap and reducing the need for communication, thus creating market efficiencies.

A Review of Literature to Derive Best Practices for Big-Data Audits in Saudi Context

In 2014, leading scholars in the field of big data auditing outlined a research agenda to explore these impacts, setting the foundation for further investigation. This paper explores the impact of big data on audit evidence, particularly in the context of Saudi Arabia’s transition to a more diversified economy under Vision 2030. This paper also seeks to synthesize current research and establish best practices for auditors in Saudi Arabia, emphasizing the importance of adapting audit processes to a growing economy that increasingly generates vast amounts of data. In recent decades, auditing practices have undergone substantial transformation by broadening the scope of audit goals and incorporating diverse, non-traditional sources of evidence, such as unstructured data from social media or IoT devices. These new data sources, while increasing audit accuracy and depth, pose challenges regarding data reliability and integrity. Over the past decade, many of these research questions have been addressed, particularly in relation to how big data enhances auditors' abilities to detect fraud, improve audit quality, and provide more accurate risk assessments. By implementing AI algorithms and advanced analytics, auditors can gain deeper insights while also addressing key concerns such as data veracity, compliance with International Financial Reporting Standards (IFRS), and the guidelines set by the Saudi Organization for Certified Public Accountants (SOCPA). As Saudi Arabia's economy diversifies and becomes more data-driven, understanding and integrating big data into audit practices will be essential for maintaining high audit standards and supporting economic growth.

Monitoring and audit quality: Does quality standards compliance matter?

Monitoring and audit quality: Does quality standards compliance matter?

International Standard on Auditing (220), Quality Management for an Audit of Financial Statements, and its Role in Enhancing Audit Quality (A Field Study on some Audit Offices in Sudan)

The main objective of this study is to know the role of the International Standard on Auditing (220) in enhancing the audit quality. To achieve this goal, (170) questionnaires were distributed to the study population which represented in some audit offices in Sudan, and (150) questionnaires were retrieved and analyzed. The study relied on the inductive approach and descriptive analytical approach. The study found several results, among which is, the audit office adopts policies and procedures for what can be consulted in meetings that, contribute to enhancing audit quality, and continuous monitoring of the progress of the audit process enhances the quality of the audit. The study concluded with a number of recommendations, the most important of which is that, necessity of spreading the culture of audit quality and its positive results among external and internal auditors in the Sudanese environment through workshops, seminars and scientific conferences.

The effect of high-quality information technology on audit quality

Information Technology (IT) is changing the working environment and working process of clients and auditors. High-quality IT can enhance data accuracy, completeness and security, and automate data collection procedures. These attributes are important to auditors as their work highly relies on the quality of data. Using data from 2005 to 2013, this study provides empirical evidence showing that high-quality IT significantly enhances audit quality and reduces audit efforts. This study contributes to the stream of literature on IT quality and audit efficiency and can help managers understand how IT investments improve their data quality and audit quality.

Effects of Audit Quality in the Relationship between Audit Committee Effectiveness and Board Characteristics on Voluntary Disclosure Quality In (Mena) Countries

Effects of Audit Quality in the Relationship between Audit Committee Effectiveness and Board Characteristics on Voluntary Disclosure Quality In (Mena) Countries