Audit Quality Research Articles

Independence, Competence, Objectivity, Ethics And Auditor Experience On Auditor Quality

This study aims to examine and analyse the influence of Independence, Competence, Objectivity, Auditor Ethics, and Auditor Experience on the Audit Quality of Auditors of Public Accountant Offices in South Jakarta in 2023. The sample in this study was an auditor who worked in 10 public Accountant Offices in South Jakarta. The sampling method used is a Purposive Sampling Method. The primary data used in this study was obtained directly from respondents. The data collection method used was a questionnaire method with 98 respondents as many respondents. Analysis of the data used is multiple linear regression analysis and using the Partial Least Square (SmartPLS) program version 3.2.9 for Windows Partial Least Square (SmartPLS) version 3.2.9 for Windows. The results of the tests showed that independence, competence, objectivity, auditor ethic, and auditor experience significantly positively affect audit quality.

Research on the Impact of Disclosure of Key Audit Matters on Corporate Financing Constraints

This paper studies the impact of key audit disclosures on corporate financing constraints through empirical analysis. Although the disclosure of key audit matters can help to reduce the information differences between management and investors and improve the audit quality, such disclosure may also be regarded as a risk signal, and the warning function to investors may cause the difficulty of corporate financing to increase. This study concludes that the increase in the number of key audit disclosures will make corporate financing more difficult. When an enterprise announces more key audit matters, the market may regard them as a stronger risk signal, causing investors to be more cautious in making investment decisions, thus increasing the financing difficulty of the enterprise. However, in companies with large board sizes, the disclosure of key audit matters can alleviate the financing constraints. Larger boards are more likely to make the right decisions and therefore may disclose fewer risky aspects of key audit matters. This study provides a new understanding of key audit issues in financing activities and a useful reference for the possible impact of macro-policy adjustments on corporate profitability. In addition, the research also provides useful information support for enterprises to understand and adapt to the new auditing standards.

Institutional Possession, Supervisory Board Size, External Auditor Quality, and Profit Quality

Institutional Possession, Supervisory Board Size, External Auditor Quality, and Profit Quality

Implementation of Internal Quality Audit at IKesT Muhammadiyah Palembang

The Internal Quality Assurance System (SPMI) in universities has an important role in the implementation and improvement of the quality of educational services provided by universities. One of the ways to evaluate the fulfillment of the higher education standards in question is through the Internal Quality Audit (AMI) process. The implementation of AMI at IKesT Muhammadiyah Palembang has been carried out well and has had a positive impact on improving the quality of higher education implementation and has also referred to SPMI and the PPEPP cycle. The Quality Assurance Institute (LPM) reported the results of the AMI training to the Rector of IKesT Muhammadiyah Palembang and invited all leaders of faculties, study programs and work units to present the results of the AMI that had been implemented, with this the rector can know where the weaknesses and shortcomings need to be improved and improved in order to create Good University Governance (GUG).

PENGARUH UKURAN PERUSAHAAN, AUDIT TENURE, AUDIT FEE DAN AUDIT DELAY TERHADAP KUALITAS AUDIT

This research aims to determine the influence of Company Size, Audit Tenure, Audit Fee, and Audit Delay on Audit Quality in food and beverage companies listed on the Indonesia Stock Exchange in 2019-2023. This type of research is quantitative research and uses secondary data in the form of audited financial reports obtained from the official IDX website. The population in this study were 43 companies in the food and beverage sector listed on the Indonesia Stock Exchange in 2019-2023 with a sample selection technique using the purposive sampling method and 12 sample companies were obtained over a 5 year period so that the data analyzed amounted to 60 data. The analysis technique used is the Logistic Regression Analysis technique with the help of the eviews 12 program. The results of this research show that simultaneously Company Size, Audit Tenure, Audit Fee, and Audit Delay have no effect on Audit Quality. Partially, company size, audit tenure and audit delay have no effect on audit quality, while audit fees have a significant effect on audit quality.

Assessment Audit: How Artificial Intelligence Affected Audit Quality of Sustainability Report Based on Auditors Perspective

This study aims to analyze audit assessment and the effects of artificial intelligence on the audit quality sustainability reports from the standpoint of auditors who provide audit opinions on audits that are conducted of sustainable financial reports. Certain audit tasks can now be automated by the audit profession thanks to technology. Artificial intelligence (AI) and big data analytics can be used to analyze huge data, one of the technological innovations that need more study than conventional data. The number of 85 auditors of Accountant Public Firms in Medan completed questionnaires that were used in this study to gather data. Following the collection of data from respondents, quantitative descriptive methodologies were used to analyze the data. The audit profession may improve the quality of audits by promoting the use of AI and big data analytics and by supporting auditors in developing their skills to stay current with new technologies. AI can improve audit quality, reduce costs, and eventually replace human workers. People are still required in the audit process, though, as AI cannot make decisions when it comes to providing audit opinions on financial reports. As a result, its contribution to the audit process is minimal. Therefore, it is hoped that this study will shed light on the potential applications of AI in the auditing process.

Study on Audit Quality Management Optimization of M Accounting Firm

With the continuous development of market economy and the increasing prosperity of capital market in our country, accounting firms are taking on more and more important responsibilities as "gatekeepers" of capital market. Audit quality, as the core of accounting firm management, directly affects the stability and development of the financial market. The level of audit quality is directly related to investors' trust and dependence on financial reports, the reputation and business development of accounting firms, and influences corporate governance, financial market stability and government supervision. All along, the regulatory authorities pay more attention to the audit quality management of the firm. In the announcement disclosed by the China Securities Regulatory Commission, the firm will be punished for illegal behaviors every year. In recent years, the Ministry of Finance and the China Annotations Association will conduct practice quality supervision and inspection of the firm every year, the audit quality management of the firm still has defects. These problems may cause a crisis of trust in the public, which in turn affects the development of the entire industry. However, the current accounting firms do not pay enough attention to the audit quality management and the supervision is insufficient, and the audit quality becomes low. In order to promote the high-quality and sustainable development of the registered accounting industry, it is urgent to strengthen the audit quality management of accounting firms. Therefore, this paper takes M Accounting Firm as the case study object, analyzes and summarizes the existing problems in audit quality management of accounting firms found during the internship, finds out the causes of the problems, and puts forward targeted optimization suggestions, so as to strengthen the audit quality management of this accounting firm and promote its healthy and sustainable development.

Unleashing the impact of environmental information disclosure on corporate green innovation: The role of audit quality and media attention

Green innovation is critical for enterprises to achieve sustainable development, although academics and entrepreneurs often associate it with financial performance. However, more research is needed on the boundary and mechanism of the effect of environmental information disclosure on corporate green innovation. Based on the data of A-share listed companies from the years 2008–2022 in China, this study discusses the impact of environmental information disclosure on green innovation. It analyzes the moderating effects of external audit quality and media attention. The results show that environmental information disclosure promotes green innovation. Further, audit quality and media attention have a positive moderating effect. In addition, this effect is more evident in non-state and heavily polluting industries. Finally, alleviating financial constraints is a critical mechanism for how environmental information disclosure affects green innovation.

Beyond the balance sheet: Assessing corporate governance through the Lens of debtholders

This study investigates the relationships between economic uncertainty (EU), corporate governance (CG), and the cost of debt (COD). Using an index-based measure of CG, this study investigates how CG influences debtholders' perspectives during periods of EU. The study utilizes a dataset of nonfinancial firms listed in European countries from 2013 to 2021. We find that EU and COD are positively associated, indicating that EU increases the COD of European firms. Second, while CG has an insignificant direct impact on COD, it has a significant negative moderating impact on the relationship between EU and COD, suggesting that although a strong CG mechanism does not have any significant direct impact on COD, it has the potential to reduce the uncertainty-induced COD of European firms. The results remain consistent with alternative proxies of COD and CG, as well as before and after the COVID-19 period. The results for CG subindices suggest that shareholder rights and compensation serve as reliable indicators for debtholders during periods of EU, while audit quality and board structure do not play any significant role in reducing uncertainty-induced COD. Our findings emphasize the key role that effective CG plays in mitigating EU's adverse effects on COD. Our results are robust to endogeneity issues such as reverse causality, selection bias, and time and industry effects.

Audit firm informatization and audit quality during COVID-19

PurposeCOVID-19 has forced audit firms to change the way they operate. One change has been to rely more on information technology (IT) and IT human capital to overcome COVID-19-related challenges. We refer to audit firms’ use of these two resources as audit firm informatization (AFI). It is important to understand whether AFI helps audit firms address challenges created by the pandemic. Thus, this study examines the impact of AFI on audit quality during the COVID-19 pandemic in China with a focus on IT human capital.Design/methodology/approachWe use a mixed-methods approach. First, we perform multivariate regression analyses on archival data. Specifically, we investigate the relationship between IT human capital and audit quality and the two mechanisms (i.e. improved efficiency and reduced audit risk) underlying the relationship. We also investigate how this relationship is moderated by features of clients, audit firms and individual auditors. Then we use interviews to corroborate the results of our regression analyses.FindingsOur analyses of archival data show that IT human capital positively affects audit quality through improved efficiency and reduced audit risk and that this positive impact is more pronounced for clients in non-manufacturing industries, those with a more opaque information environment, audit firms with greater industry coverage and individual auditors with less experience. Our interview data indicate that audit firms with more advanced AFI and a higher level of IT human capital in particular are less disrupted by the pandemic and are better able to use IT to address challenges associated with COVID-19. Furthermore, the results confirm that improved efficiency and reduced audit risk are the mechanisms through which AFI enhances audit quality. Finally, we identify issues associated with the use of IT.Originality/valueThis study is the first to investigate how IT human capital (and by extension AFI) influences audit quality in the context of the COVID-19 pandemic. Our findings should be of interest to practitioners and setters of auditing standards.

CHALLENGES AND OPPORTUNITIES OF DIGITAL AUDITING: A LOOK BEYOND THE YEAR 2020

Digital technologies, including artificial intelligence (AI), big data, and blockchain, have significantly changed the auditing landscape. This study aims to explore the impact of these technologies on audit practices in the future, focussing on the challenges and opportunities auditors face. Using a qualitative approach, the study involved in-depth interviews, case studies, and participatory observations of several companies adopting digital technology in their audits. The study results show that applying digital technology can increase efficiency, accuracy, and transparency in the audit process. AI and big data enable faster and more comprehensive data analysis, while blockchain improves the reliability and integrity of audited data. However, the study also reveals significant challenges, such as a lack of technology skills among auditors, concerns related to data security and privacy, and potential changes in the role of auditors that could affect audit quality. On the other hand, the digital era also opens opportunities for auditors to engage in multidisciplinary collaboration and develop new competencies relevant to modern technology. However, to make the most of these opportunities, auditors need to maintain strong ethical principles and comply with applicable regulations.

Information System Audit Experience and Accountability to Internal Audit Quality

The purpose of this research to determine the experience of information system audits and accountability for audit quality at the Inspectorate Bandung. Data expected to be a solution quality of internal audits. Obtained through a survey by distributing questionnaires. According to the issue, they do not have competent experience and accountability in carrying out quality audits. Have 30 samples out of 60 observed in population field. Using descriptive and verification methods. Statistical data processing SPSS. The results show that: (1) Information systems audit experience has no direct effect on audit quality and (2) Accountability has a direct effect on internal audit quality.

The Effect of Auditing Team Work Related Stress on Audit Quality

The Effect of Auditing Team Work Related Stress on Audit Quality

PENGARUH KOMITE AUDIT, UKURAN PERUSAHAAN DAN FEE AUDIT TERHADAP KUALITAS AUDIT PADA PERUSAHAAN SUB SEKTOR FOOD AND BEVERAGE YANG TERDAFTAR PADA BURSA EFEK INDONESIA TAHUN 2017-2022

This research aims to find out and provide empirical evidence regarding the influence of the audit committee, company size and audit fees on audit quality. The population in this research is manufacturing companies operating in the Food and Beverage Sub Sector Companies Listed on the Indonesian Stock Exchange 2017-2022. the influence is partial or simultaneous. This research uses a quantitative approach and uses associative methods. The samples used were 10 samples of companies which used secondary data obtained from the Company's Financial Reports. The method used is statistical testing which includes logistic regression testing, hypothesis testing and coefficient of determination. The research results show that the audit committee partially has no effect on audit quality using the eviews version 9 and Microsoft Excel applications. The research results show that partially the audit committee has no effect on audit quality, partially company size has no effect on audit quality, partially audit fees have an effect on audit quality, simultaneously, audit committee, company size and audit fees have an effect on audit quality

The Role of Auditor Ethics in Moderating the Effect of Auditor Competence, Independence, and Audit Fees on Audit Quality (Case Study at Malang Public Accounting Firm)

The Role of Auditor Ethics in Moderating the Effect of Auditor Competence, Independence, and Audit Fees on Audit Quality (Case Study at Malang Public Accounting Firm)

Leader versus lagger: How the timing of financial reports affects audit quality and investment efficiency

AbstractThis paper examines how relative timing affects the quality of financial reports in a staggered reporting system in which some firms report earlier than others. We show that the audit quality of the leading firm exceeds that of the lagger. Investment efficiency also differs systematically across firms, depending on the relative reporting timing as well as the audit market structure. Audit regulations mitigate the misalignment of interests between auditors and investors but limit the effect of information spillovers. We characterize the socially optimal auditing standards and show how and why imposing minimum audit quality requirements complements and/or substitutes for adjusting auditors' legal liability. Overall, we show that a staggered reporting system dominates a simultaneous reporting system in enhancing audit quality and investment efficiency through regulation.

The Effect of External Audit Quality, Related Party Transactions, Political Connec-tions, Esg Performance and Independent Assurance on Sustainability Reports on Firm Value

This research is based on the importance of companies knowing the factors that can affect the value of the firm in accordance with the development of the times so that the company can continue to survive in success in the long term. This study combines factors related to the company's non-financial performance, including sustainability performance such as ESG performance and the use of independent assurance in sustainability reports as well as other non-financial performance such as the quality of external audits, related party transactions, and political connections to determine the influence of these factors on the firm's value. The method used in this study is a panel data regression analysis method using e-views 9 with a sample of companies in the energy and basic materials sectors listed on the Indonesia Stock Exchange (IDX) in 2021-2023. The results of this study show that the quality of external audits, related party transactions, political connections, environmental performance (ESG_Environment), social performance to employees (ESG_Social Employees) and the use of independent assurance in sustainability reports have no effect on firm value while, social performance to the community (ESG_Social Community) and governance performance (ESG_Governance) have a positive effect on firm value.

THE INFLUENCE OF AUDIT DELAY, SIZE OF PUBLIC ACCOUNTING FIRM, AUDIT OPINION, AND MANAGEMENT CHANGE ON AUDITOR SWITCHING

This study explores the impact of audit delay, the size of public accounting firms, audit opinions, and management changes on auditor switching among companies listed on the Indonesia Stock Exchange. The research aims to identify the key factors that influence a company's decision to switch auditors. Using logistic regression analysis and secondary data from financial reports, the study introduces a unique approach by simultaneously analyzing four independent variables, which is rarely done in prior studies. The results reveal that audit delay and management changes significantly affect auditor switching, while the size of public accounting firms and audit opinions do not have a significant impact. The findings suggest that operational and managerial factors play a more critical role in auditor switching decisions compared to financial factors. Theoretically, the study supports the relevance of agency theory in explaining auditor switching, particularly in addressing conflicts of interest between management and shareholders. Practically, these results provide valuable insights for company management when deciding to switch auditors and highlight the importance for regulators to implement policies that enhance transparency and audit quality, strengthening corporate governance practices in Indonesia.

Risk Governance Unlocks Islamic Banks’ Dual Performance Goals

This study investigates the moderating effect of risk governance structures on the relationship between risk management—covering insolvency, financing, and operational risks—and the financial and social performance of Islamic banks in Indonesia. Using dynamic panel data regression, the analysis draws on annual report data from 11 Islamic commercial banks over the period from 2012 to 2021. The findings show that certain risk governance structures, such as the size and independence of the audit committee, the expertise of its members, the frequency of meetings, and the quality of external audits, significantly enhance the effectiveness of risk management in improving both financial and social outcomes. Moreover, unique Islamic banking structures, such as the size of the Shariah Supervisory Board and the frequency of its meetings, further strengthen these effects. These results highlight the importance of robust governance in optimizing risk management and improving the overall performance of Islamic banks, with implications for regulatory bodies and Islamic financial institutions aiming to improve governance frameworks.

Greenwashing and financial performance of firms: the moderating role of internal audit quality and digital technologies

Greenwashing and financial performance of firms: the moderating role of internal audit quality and digital technologies