This section has attempted, at a high level, to trace the rise of independence concerns within the quality discourse and how this came to dominate the debates, possibly even ‘crowding out’ other quality concerns such as competence. A long and protracted history has no doubt been oversimplified in order to draw out this trajectory amidst the complexity of many interrelated factors. This rise can perhaps also be most helpfully thought of as a constellation in itself of overlapping and competing elements and discourses. The key argument being made is that during this period, the confluence of a number of different elements including: the prevailing economic climate, the interjection of high profile failures, the EC’s efforts to harmonise regulations across member states, the expansion of the audit firms into non-audit services, the inherent lack of observability of independence and finally, the underlying belief that the problem of independence was one of perceptions contributed to this rise. With this last point especially, efforts therefore became focused on making both independence and regulatory reforms more visible - through the promulgation of detailed rules, explicit standards or radical proposals of reform, all targeted at increasing the visibility and improving perceptions of independence. However, this only fuelled the rise of independence concerns further. Whilst the large scale failures played a role, they were not, it is argued, the only element leading to the rise of independence which, as this discussion has attempted to show, started on its trajectory well before the collapse of Enron. Indeed, research conducted at that time indicated that rarely had independence been found to be implicated in audit failures. Based on an analysis of lawsuits and prosecutions of auditors for securities fraud, Bartlett (1991) found that most lawsuits and prosecutions of auditors have been based on assertions of incompetence or lack of due diligence in the application of auditing standards, rather than lack of independence.
Prior studies have shown that audit tenure has a significant influence on auditquality. This effect was either positive or negative. Watts and Zimmerman (1983) found that the longer the auditor tenure, the more dependence on clients. Auditor’s objectivity and independence will be destroyed and hence, auditquality reduces. Copley and Doucet (1993) opined that the longer the period of engagement, the higher the risk of lower auditquality. This was supported by the findings in: (Arrunada & Paz-Ares, 1998, Dopuch, King &Schwarts 2001, Ebrahim, 2001,). Walker, Lewis and Casterella (2001) also investigated the link between the length of the audit engagement and audit failures and found that auditor rotation may not necessarily improve auditquality. Carcello and Nagy (2004) explored the association of changing the auditor and auditquality from the point of view of fraudulent reporting. They found no significant relationships intended of the long-term tenure of the auditors. They concluded that mandatory changes of auditors might have a negative impact on auditquality.
AUDIT FIRM TENURE AND FIRM PERFORMANCE Studies have indicated that audit firm tenure has a significant influence on auditquality. This effect was either positive or negative. In this regard, studies have shown that the longer the auditor tenure, the more dependence on clients (Dopuch, King, & Schwarts, 2001; Ebrahim, 2001). Dopuch, King, and Schwarts (2001) investigated whether mandatory audit rotation increase independence. Using multi - period interaction between a manager and auditor, the result found that the auditor compromises his independence most often in the no rotation period. Also, Carcello and Nagy (2004) explored the association of changing the auditor and auditquality from the point of view of fraudulent reporting. They found no significant relationship intended of the long-term tenure of the auditors. They maintained that mandatory changes of auditors might have a negative impact on auditquality. Similarly, Carey and Simnett (2006) explored the association between audit tenure and abnormal working capital accrual. Their results show that there is no evidence of an association of either the signed or absolute amount of abnormal working capital accruals with long audit partner tenure. In addition, Abedalgader, Ibrahim, and Baker (2010), investigated the contribution of audit tenure and firm size on auditquality by using discretionary accruals as proxy for auditquality against auditor’s tenure and firm size in Jordan and found that auditor’s tenure is negatively associated to auditquality. Onwuchekwa, Erah, and Izedonmi (2012) in their own study examined the linkage between audit rotation and audit independence. Using data from percentage analysis, the study found that the mandatory audit rotation has positive link on independence of auditors. However, Adeniyi and Mieseigha (2013) examined the nexus between audit partners tenure and auditquality. Their result showed that there is a negative nexus between auditor tenure and auditquality.
This development has heightened the search for mechanisms that would enhance the quality of corporate financial reports and the entire financial reporting processes. Prior studies (example, Treadway Commission, 1987 and Blue Ribbon Committee, 1999), reveal that improvement in the quality of financial reporting is often proposed as one of the major reasons why companies establish audit committees. This is because audit committees are often seen as having the potentials of reducing the chances of fraud and fraudulent practices, thus enhancing the quality of financial reporting. Although prior studies have examined the relationship between audit committee attributes and the quality of financial reporting; most of these studies were based on data and sample from developed economies. Empirical study on the influence of audit committee attributes on the quality of financial reporting in the Nigerian context is very scanty. Also, most of the studies, including those in advanced economies, used proxies to measure the quality of financial reporting. This current study overcame these limitations. The study is expected to contribute towards equipping regulatory and supervisory agencies with knowledge of the attributes which greatly influenced the QFR in the context of Nigerian economy and the banking sector in particular. Such knowledge will guide them in future review of the regulatory framework towards addressing the problem of fraudulent reporting in Nigeria.
We developed the dashboard carefully considering the latest evidence, theory, and design suggestions and in- volved intensive care professionals in the process . This likely contributed to the fact that in 91.7% of cases, feedback convinced participants to change practice. The indicator set was developed in close collaboration with experts and pilot tested to ensure that the indicators are consistent with professionals’ goals and priorities and under their control [13, 23]. It seems however inevitable that some professionals have concerns about the import- ance of certain indicators. Lack of trust in data quality, often identified as a barrier to change [15, 27], might in this study have particularly related to the perception that the targeted behaviour is performed in practice (e.g. patients’ pain is measured each shift) but not recorded electronically. We undertook various data quality assur- ance efforts  and provided patient-level data and subgroup analyses to increase transparency . More intensive measures might be required to ensure profes- sionals recognise the importance of indicators and trust in the data, e.g. through verbal feedback and when feed- back is discussed by teams rather than individuals [1, 6]. In addition we delivered multiple performance compara- tors to prevent benchmarks being perceived as unrealis- tically high; namely median, top 10% peer performance, and own past performance. Delivering multiple compar- ators is at odds with recent suggestions for A&F design because it could create ambiguity in what should be achieved . Our findings however show that multiple comparators worked well despite possible ambiguities. To reduce ambiguity, we delivered traffic light colour- coded benchmark comparisons.
Auditquality is considered as an essential factor affecting the reliability of financial information. The aim of this study is to assess the effects of audit firm characteristics, including audit reputation, audit fees and audit firm size, on auditquality. A sample of 192 companies listed on Hanoi and Ho Chi Minh Stock Exchange for the period of 2006-2014 was selected. Multiple regression was used to analyze the data. The findings show that Big 4 auditors in Vietnam provide high auditquality than non-Big 4 auditors. Interestingly, in Vietnam context, except for the audit firms in the Big 4 group, the findings suggest that smaller audit firms provide better auditquality. Additionally, the results reveal that the more audit fees the auditors receive, the lower auditquality they provide. The critical role of auditquality has attracted significantly scholarly attention, however, prior studies have mainly focused on firms in developed countries. Little is known about auditquality in an emerging economy context such as Vietnam. This study adds to the limited number of studies on auditquality of listed companies in emerging economies.
Licensed under Creative Common Page 381 The key advantage of audit planning is seen in the quality of auditing results. Audit planning prevents errors which may occur in auditing process and frauds that may be face during the in the final auditing phase. Conclusively, it reduces error and fraud risk in auditing and enhances auditquality. However, audit planning possesses a significant power to mitigate high risks originated from diverse sources e.g. misstatement, inappropriate audit team building, lack of auditor’s competence and existence of need for external expert. In this paper, impact of audit planning on total quality of audit is examined in the sample of 16 auditors in Uzbekistan. Author specified an econometric model based on the questionnaire data and analysed the applicability and effect of audit planning by local audit firms of Uzbekistan.
Because melancholy, as idea, is without corporeality, the scholar’s essence likens itself to that spiritual, ethereal quality. The mind leads itself to metaphor and abstraction, though this comes at the risk of the body, which is also of great concern to Ficino – the latter preaches moderation and diet in other sections of The Book of Life. A mind and body not prepared, or predisposed, to these rigours of melancholy risks everything, risks death. Moreover, if the mind can no longer tell apart the fantasy from the perception of reality, there may be no return to a sanguine temperament for the melancholic scholar. As Eric Wilson poignantly writes, summarizing Ficino’s view of “melancholy philosophers”: the latter are “sorrowful thinkers [that] delve into the crepuscular continuum between clarity and clarity. They think that edges, circumferences, and fringes are the most interesting places in the world, for there on the terminal things reveal their deepest mysteries: their blurred identities, their relationship to opposites, their tortured duplicities” (75). In Wilson’s assessment of “Ficino’s hope,” the former argues that the latter constructs an image of the “melancholy philosopher” as one who, “after a long season of brooding on the boundary between conflicting potencies, will discover a hidden complicity, an untapped concord … [a] sudden insight into secret marriages between antinomies” (76). Melancholy, as “a secret marriage between antimonies,” is an astrological, cosmological and natural force that drives scholarly discovery.
Independent variables in this study are audit experience, task complexity and compliance pressure. The auditor's experience in question is the audit experience in conducting financial statement audits both in terms of the length of time, and the number of assignments that have been carried out. Gusnardi (2003: 8) suggests that auditor experience (audit experience) can be measured from the level of position in the structure where the auditor works, years of experience, a combination of levels of office and years of experience, expertise possessed by auditors related to audits, and training once audited by auditors. This variable is measured using indicators developed by Suraida (2003). In the questions submitted on the questionnaire combined for audit experience, the length of time worked as an auditor and how many assignments he has ever handled.
Public Accountant and Public Accountant Firm, while audit firms who attend are chairmen of Price Waterhouse Coopers, Ernst & Young, Delloite from each country of ASEAN. Moreover, there is observer from Global Public Policy Committee-Regulatory Working Group (GPPC-RWG) that is a group of six leaders of global audit firms. In this meeting, the main issue is about AuditQuality Indicators that is an instrument to evaluate a qualified audit. This study analyzes the Effect of Contingency on Audit Tenure and AuditQuality. The problem investigated can be formulated as the: (a) does audit tenure affect auditquality? (b) does audit tenure have effect on auditquality through the size of public account firm as moderating variable? (c) does audit tenure have effect on auditquality through the amount of fee audit as moderating variable? The objective of study is to examine contingency effect (the size of PAF or fee audit) on audit tenure as well as its implication with auditquality. This study is addressed to give advantage to various parties, among others, companies, academicians, government, and community about contingency effect (the size of PAF or fee audit) on audit tenure as well as its implication with auditquality.
Many U.S. state and local governments utilize external CPA firms for basic financial statement audits and single audits. Depending on the state, either a state audit agency or a government entity can issue a request for proposal (RFP) to solicit audit services. CPA firms can then respond by submitting audit proposals, which generally describe the qualification of the firm, background of the team members, audit plans and procedures, and estimated audit fees. Study 2 discusses audit procurement practices in the public sector and investigates the determinants of auditor choice in a government RFP process. Specifically, this study examines the following two research questions. First, do audit service quality attributes contained in audit proposals predict auditor selection in a RFP process, and if so, which attributes are most predictive of choice? Second, does political competition and the risk of corruption influence audit procurement quality? Governmental auditing is one cornerstone of good public sector governance (ALGA 2014). Auditors perform an especially important function in promoting credibility, equity, accountability, and appropriate behavior of public sector officials, while reducing the risk of public corruption (IIA 2012). More importantly, an effective governmental audit can increase citizens and stakeholders’ ability to evaluate and monitor public officials’ performance and thus instill confidence in government.
In this study, the results show that ACE has no significant influence on lnAF in the pre- and post-2007 Code period is in contrast with the result of [14, 12, 15]. These studies had argued that an effective AC demands addition audit procedures in order to assure the quality of audit process, leading to an increase in audit fees, is not supported by the results of our study. The results also show that BOD_E has no significant impact on lnAF in the pre-2007 Code period. The finding of BOD_E has a significant influence on lnAF in the post-2007 Code is consistent with the US study of [11, 13] and the UK study of  who found that an effective board helps to reduce the frequency of fraudulent financial reporting , lower the occurrence of earnings overstatement , improve its governance role of monitoring the financial reporting process  and enhance the quality of audit and financial reporting process  and therefore will demand more audit procedures from the auditors, leading to an increase in audit fees.
In recent decades, there has been a noticeable increase in the practice of earnings management (EM) as a proxy for financial reporting, especially real activities, with effect on the quality of financial statements. The role of the audit committee in mitigating EM remains ambiguous because of inconclusive findings. Therefore, this study examines the moderating effect of auditquality and audit committee on financial reporting quality, also known as real earnings management in Malaysian companies. The results show that corporate governance mechanism such as financial accounting expert, meeting and indicate significant results with real EM while, audit committee independence and size, shows an insignificant result on real EM. In addition, the results show that auditquality of the audit committee leads to less aggressive EM practice in real activities. The findings also show that auditquality and audit committee has a significant role in restricting the real EM. Auditquality is found to significantly moderate the relationship between audit committee with financial reporting quality proxy. Overall, this study provides a reference point for the relevant parties such as regulatory bodies, policymakers and standard setters towards improving the quality of earnings and corporate governance practices in ensuring credible accounting information.
The most effective way of reducing frauds is to establish an effective internal control system. Effectiveness is a word that has been defined by different researchers, for instance Arena and Azzone (2009) defined internal control quality as the capacity to obtain results that are consistent with targets objective, while, Dittenhofer (2001) view internal control quality as the ability toward the achievement of the objectives and goals. Internal control systems operate at different levels of effectiveness. Internal control can be judged effective in each of the three categories, respectively, if the board of directors and management have reasonable assurance that: They understand the extent to which the entity's operations objectives are being achieved, published financial statements are being prepared reliably, applicable laws and regulations are being complied with. Also effective internal control requires; appropriate accounting procedure and system, division of duties i.e. separation of responsibilities, especially those of authorization, regular verification of supervision of each person’s work by their superior officers (Badara, 2012).
Since the main purpose of an audit is to foster trust in the quality of reporting (International Auditing and Assurance Standards Board, 2014), it is indeed of the utmost importance that audits are of high quality; it makes sense that regulators are concerned. The questions that arise are not only regarding the current quality of audits, but also which factors influence this quality. Prior research (e.g. Francis, Michas & Seavey, 2012; DeFond & Zhang, 2014) has shown that one of the many variables that have an effect on auditquality is competition within the audit market. Market structures are analysed in order to measure competition, which can be done in two ways: static and dynamic. Research has been done to determine static market structures (e.g. Boone, Khurana & Raman, 2012; Francis et al., 2012; Newton, Wang & Wilkins, 2013), but no one has yet examined dynamic market structures in the market for audit services and its influence on auditquality. That is what this research sets out to do.
May 3, 2011 is a historic date for the Indonesian Public Accountants profession. This is because on that date the government promulgated Law Number 5 Year 2011 concerning Public Accountants. The ratification of this Law is a form of state recognition of this profession as well as a form of protection for the profession and users of Public Accountants services. One of the most important provisions in this Law is the granting of special rights to Public Accountants to provide insurance services. As explained in the Act, insurance services are services that contain the opinions of public accountants regarding whether financial information is in accordance with relevant criteria. To guarantee the rights of this Public Accountant, the Public Accountants Act also regulates criminal threats for those who are not Public Accountants with imprisonment of six years when providing insurance services. Thus, with this provision, it is expected that insurance services will only be provided by those who have competencies so that quality audits will be obtained. However, since the promulgation of the Public Accountants Act, auditquality in Indonesia is still questionable because of the emergence of two major audit scandals in Indonesia, namely an audit scandal over the financial statements of PT Indosat, Tbk. and PT Sunprima Nusantara Pembiayaan (SNP) Finance which involved two large Public Accountants Firm (KAP). Not only that, the Finance Professions Supervisory Centre-Ministry of Finance (PPPK-MoF), in 2015 stated that 75% of the audit engagements examined during 2014 did not meet audit standards. These conditions make it difficult for us to determine whether auditquality in Indonesia have been achieved. Auditquality has become the concern of many regulators, professional associations and academics.
Auditquality as a means of monitoring corporate governance from the outside, can improve firm performance. The study results proved that large auditors have a good reputation which reflects the good quality than smaller auditor . Z.V. Palmrose suggest that the big-8 auditors audit charge high fees because of high auditquality . A. Martinez, and A. de Jesus Moraes found that auditors imposes higher audit fees will give a signal to markets that high auditquality may enhance shareholder value .
The locus of control is a characteristic of personality that describes a person's level of belief about the extent to which they can control the factors that affect their success or failure (Rotter, 1966). The higher the locus of individual external control, the greater the likelihood that the individual is engaging in reduced auditquality behavior. Individuals with external control locus are more vulnerable and the strategy chosen to solve a problem tends to be reactive. The behavior is performed by the auditor to manipulate the audit process in order to achieve the target performance of individual auditors. The results of Reed et al. (1994), Gable and Dangello (2010), Donnelly et al. (2003) and Chen and Sylverthorne (2008) show that the locus of external control has a positive and significant influence on reduced auditquality behavior, job satisfaction, organizational commitment and turnover intention change. In addition, auditors with high locus of external controls consider job stress to be a factor outside the auditor's controls, thus increasing the opportunity to perform
the natural logarithm of total assets, LEVERAGE; measured as the ratio of total liabilities to total assets, RETURN; measured by the return on assets, and GROWTH; measured by the change in sales compared to the prior year, divided by the sales from the prior year. The variable BIG4 is included to control for differences in auditquality, since Big-4 audit firms provide a higher quality of audit services than non-Big-4 firms (Palmrose, 1988; Feroz, Park & Pastena, 1991; Tepalagul & Lin, 2015). SIZE is included as a control variable because larger clients will have more assets to sell in the case that they will experience financial distress (Jackson et al., 2008) and because larger companies have greater negotiation power and are less likely to go bankrupt (Carey & Simnett, 2006). The natural logarithm of the total assets will be used instead of the absolute amount of total assets, in order to transform the otherwise skewed values into approximately normally distributed values. LEVERAGE (the ratio of total liabilities to total assets) is included as a control variable, because high levels of leverage indicate a higher level of risk (Jackson et al., 2008; Carey & Simnett, 2006). The variable RETURN (return on assets) is included as a market based measure of risk and firm performance (Carey & Simnett, 2006). The last control variable, GROWTH is used as an additional measure of firm performance, measured by using the change in sales compared to the prior year, divided by the sales from the prior year. Table 4 summarizes the variables which are used in the analysis.
The term `Digitization` is believed to be used by Wachal (1971) , where he has discussed the implications on the society as a consequence from digitization. Digitization is the usage of technology and digital advances, such as analytics, mobility, social media and smart embedded devices, to radically improve performance. Digitization and sweeping developments in Information Technology (IT) has stimulated the computer program designers to design the soft wares to assist Auditors in examining, testing, gathering evidence, conducting analytical tests, evaluating internal control, sampling data, documenting the audit, scheduling the audit, printing exception reports and preparing audit reports (Crutchley, C.,et al. 2007) . Though this process is a topic within auditing research and theory, the auditors and the clients are exploiting and implementing digital innovations to have business efficiencies, increase customer satisfaction, increase productivity and to develop good business strategies . The machines, methods and products become smarter and smarter with advancement in the technology, like ‘Sensors and Radio-frequency.