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Using a qualitative grounded theory approach, this study explores the methods experienced external auditors use to detect fraudulent financial reporting (FFR) during standard audits.

Semi-structured interviews were conducted with 24 experienced external auditors to explore the methods they used to detect FFR successfully during standard external audits.

The authors find 58 methods used for FFR detection, out of which the following methods are frequently used and help in detecting more than one type of FFR: (1) specific analytical procedures, (2) positive confirmation, (3) understanding of the client's business and industry, (4) the inspection of specific documents, (5) a detailed analysis of the audit client's anti-fraud controls and (6) investigating tip-offs from suppliers, employees and customers.

Based on the grounded theory approach, the authors theorise that auditors must return to the basics and focus on specific audit procedures highlighted in this study for effective fraud detection.

The study provides practical guidance, including 58 methods used in audit practice to detect FFR. This knowledge can improve auditors' skills in detecting material misstatements due to fraud. Besides, analytical procedures and positive confirmation helped external auditors in this study detect all forms of FFR, yet they are overlooked in the external audit practice. Therefore, audit firms should emphasise the significance of these audit procedures in their professional audit training programmes. Audit regulators should advise auditors to consider positive confirmation instead of negative confirmation in financial audits to increase the likelihood of FFR detection. Moreover, audit standards (ISA 240 and SAS 99) should explicitly require auditors to conduct a detailed analysis of the client's anti-fraud controls.

This is the first study to identify actual, effective methods used by external auditors in detecting FFR during the ordinary course of an audit.

This study assesses the perception of academics and practitioners of ramifications that may have impacted audit evidence quality during COVID-19 in Egypt.

A questionnaire was collected and designed regarding the factors affecting the quality of audit evidence during the COVID-19 pandemic using a five-point Likert scale, and detailed descriptive statistics and regression analyses were conducted.

The study finds that there is no significant association between social distancing (SD), changing in the economic environment (CEE), time constraint (TC) and stress on audit personnel (SAP) as repercussions of the COVID-19 pandemic with the quality of audit evidence (QAE). The disruption in operational results (DOR), changes in the internal control (CIC) and the stress on client personnel (SCP) significantly affect the quality of audit evidence. Moreover, there is a significant difference between Big and non-Big Four audit firms in terms of changes in economic conditions, internal controls, disruption of operational results and time-constraint variables. The latter has significantly affected the audit evidence quality for both academics and professionals.

Due to the implementation of SD and work-from-home policies, audit firms are highly recommended to invest more in digital programs and to be more adaptable to work-from-home, which policy and enhances the effectiveness and flexibility of communication between auditors and their clients.

This paper is one of the foremost papers that provides empirical evidence for the antecedents or variables that may affect audit quality evidence due to the COVID-19 pandemic.

This study aims to examine the effect of audit client’s use of blockchain (BC) on auditing accounting estimates (AEs), especially the inherent risk (IR), control risk (CR) and collection of audit evidence.

The study used a questionnaire to collect data for a sample of 249 auditors. A partial least squares method is used to test the hypotheses.

The results showed positive relationship between audit client’s use of BC and both IR and CR when auditing AEs. The results also showed the BC improves the collection of sufficient and appropriate audit evidence when auditing AEs.

This study did not address all the risks associated with auditing AEs, including fraud, detection, sampling and nonsampling risks, and the procedures and tests for auditing AEs.

There are several implications of this research, including that it informs the revision of auditing standards and guidelines to correspond with successive technological changes, which subsequently clarify the roles and responsibilities of auditors, and the study findings will also cause changes to the design and form of audit procedures so as to obtain sufficient and appropriate audit evidence.

To the best of the authors’ knowledge, this study is considered the first of its kind that deals with the effects of audit client’s use of BC on audit AEs in the Middle East and North Africa region. This study also presented different sets of measures as proxies for measuring IR, CR and AE.

The study aims to determine whether audited organizations experience differences between external audits and official controls.

A survey among 100 organic food producers was conducted to explore differences regarding the usability of external audits and official controls. The survey was conducted in 2020 using the computer-assisted telephone interview (CATI) method supplemented by the computer-assisted web interview (CAWI) method. Organizations processing organic farming products in Poland were chosen for the study.

Three primary benefits associated with external audits and official controls were identified, i.e. (1) enabling and initiating activities related to the improvement of the organization, (2) improving the financial performance of the organization and (3) enhancing credibility. For most organizations, the assessment of these features was at the same level for both external audits and official control. However, if these assessments differed, commercial audits were assessed at a higher level than official controls.

The study is limited to only one specific type of manufacturing organization and one European country.

The literature review shows some conceptual differences between audits and official controls, but the results of this study show that the business environment does not perceive these differences as significant. Thus, the value of the study is reflected in the conclusion that both external audits and official controls are considered useful and credible approaches to monitoring the quality within the organization, which allows us to state that external evaluation is generally seen as an opportunity to improve the performance of the organization.

This study aims to investigate the moderating effect of the COVID-19 epidemic on the relationship between key audit matter (KAM) and auditing quality.

The authors use the ordinary least squares regression on data from 942 firm-year observations of Jordanian non-financial institutions across the period (2017–2022) to test the hypotheses. The authors use content analysis method to measure levels of KAM disclosure.

The investigation’s findings highlight the importance of KAM disclosure in achieving audit quality in line with international standard on auditing no. 701 (ISA-701) requirements. COVID-19 is also found to have a positive relationship with audit quality, further confirming the crisis’s devastating impact on audit complexity and risks and providing evidence for the need for supplementary, high-quality audit services. Due to the correlation between KAM disclosure and increased auditor workload and responsibility, the analysis reveals that the COVID-19 factor strengthens the link between KAM disclosure and audit quality.

This study has the potential to be used as a basis for the creation of a new regulation or standard regarding the reporting of unfavourable events in financial filings. This study’s findings provide standard-setters, regulators and policymakers with current empirical data on the effects of implementing ISA-701’s mandate for external auditors to provide more information on KAM. The COVID-19 crisis offers a suitable setting in which to examine the value of precautionary disclosures in times of economic uncertainty, as well as the significance of confidence interval disclosures and the role of external auditing in calming investor fears. This analysis is helpful for stakeholders, regulatory agencies, standard-setters and readers of audit reports who are curious about the current state of KAM disclosures and the implementation of ISA-701. The results may have ramifications for academia in the form of a call for more evidence expanding this data to other burgeoning fields to have a clear explanation of the real impact of reporting KAM on audit practices.

To the authors’ awareness, this research is one of the few empirical studies on the effect of the COVID-19 crisis on auditing procedures, and more specifically, the effect of disclosures on KAM by external auditors on audit quality. This study’s findings represent preliminary scientific evidence linking the pandemic to business performance. Minimal research has been done on how auditors in developing nations react to pandemic investor protection and how auditors’ enlarged reporting responsibilities affect them. The vast majority of auditing studies have been conducted in a highly regulated system, so this research contributes by examining audit behaviour in a weak legal context.

Using attribution theory, this study examined the effects of situational factors [time budget pressure (TBP), organisational ethical culture (OEC) and quality control procedures (QCPs)] and dispositional factors [auditor professional commitment (APC) and internal locus of control (ILOC)] on audit quality threatening behaviour (AQTB). In addition, it observed the moderating role of religiosity in the relationship between situational and dispositional factors and AQTB.

A total of 189 external auditors responded to the survey questionnaire. This study employed structural equation modelling via SmartPLS to analyse the proposed model.

The results documented that the OEC and QCPs situational factors were negatively related to the incidence of AQTB, whilst TBP was positively linked to the incidence of AQTB. Dispositional factors APC and ILOC were negatively connected to AQTB. Furthermore, the findings recorded the moderating effect of religiosity on most of the situational and dispositional factors related to AQTB.

Regulators and accounting firms' efforts to promote high audit quality (AQ) may consider the theological/religious lens and reinforce ethical culture and quality control to reduce AQTB.

The findings provide further insights into situational and dispositional factors that may cause or impede the incidence of AQTB in auditing practices, as well as the moderating role of religiosity in curbing AQTB.

The purpose of this paper is to provide new scientific knowledge concerning the impact of the Covid-19 pandemic on auditing quality as determined by audit fees for both family- and non-family-owned firms in Jordan.

The authors use an ordinary least squares (OLS) regression firm-clustered standard error employing data from 200 Jordanian enterprises between 2005 and 2020 to validate this study's hypotheses.

The regression findings suggest that enterprises run by families are better able to handle crises and spend less on audits. Companies that are not family-owned have to spend the most on monitoring tasks since they need to take extra steps to prevent the agency problem and make their financial statements stand out from their peers in order to attract more investors. Additional analysis that stretched out throughout 2005–2022 came to the same findings.

The findings can be beneficial for authorities to better regulate and supervise the auditing sector. Political leaders, legislators, regulators and the auditing industry can all learn important lessons from the findings as they assess the growing concerns in a turbulent economic situation. The results of this research can, therefore, be utilised to reassure investors and assist policymakers in crafting workable responses to Covid-19's creation of financial problems. After the devastation caused by the coronavirus, these findings may be used to strengthen the laws that oversee Jordan's auditing sector.

In emerging nations like Jordan, where there is a clear concentration of ownership and a predominance of high levels of family ownership, and to the best of the authors' knowledge, this is the first empirical study to compare the auditing quality of family-owned versus non-family-owned enterprises. Preliminary insights into the crisis management tactics of family and non-family organisations are provided by this first empirical investigation of the consequences of the Covid-19 crisis on family-owned firms.

The purpose of this paper is to show that third-party quality audits (TPQAs) facilitate performance improvement and give confidence to organisations concerning the process quality of services and products. However, because of inconsistencies and unethical practices often observed in the industry, organisations question the significance of TPQA. A perception exists that its initial purpose as an impartial tool ensuring quality of deliverables is no longer upheld. Hence, the need to determine and explain the influence of the ISO 19011 standard interpretation on the application of the audit guidelines in performing TPQA, to promote consistency in the audit process.

The study employed document analysis of the ISO 19011 standard, followed by semi-structured interviews with certification managers (CBs) to gain insight related to their interpretation and application of the ISO 19011 guidelines.

The CBs interpret the ISO 19011 guidelines differently; hence, their application of the standard to compile their audit documents differ. Adherence to the principles of auditing particularly, integrity and independence were found as the core of the audit process while their disregard reflects failure of the real intent of auditing. The inconsistencies in the audit procedures and documents developed for auditors are ascribed to some CBs’ personal interpretations.

The study explores how the different interpretations of the ISO 19011 standard prevail and are perceived by the CBs and auditors. The findings aim to support standardisation and reduce the variations across and amongst the different CBs and auditors.

This study reviews and discusses the accounting literature that analyzes the role of auditors and enforcers in the context of fraud.

This literature review includes both qualitative and quantitative studies, based on the idea that the findings from different research paradigms can shed light on the complex interactions between different financial reporting controls. The authors use a mixed-methods research synthesis and select 64 accounting journal articles to analyze the main proxies for fraud, the stages of the fraud process under investigation and the roles played by auditors and enforcers.

The study highlights heterogeneity with respect to the terms and concepts used to capture the fraud phenomenon, a fragmentation in terms of the measures used in quantitative studies and a low level of detail in the fraud analysis. The review also shows a limited number of case studies and a lack of focus on the interaction and interplay between enforcers and auditors.

This study outlines directions for future accounting research on fraud.

The analysis underscores the need for the academic community, policymakers and practitioners to work together to prevent the destructive economic and social consequences of fraud in an increasingly complex and interconnected environment.

This study differs from previous literature reviews that focus on a single monitoring mechanism or deal with fraud in a broadly manner by discussing how the accounting literature addresses the roles and the complex interplay between enforcers and auditors in the context of accounting fraud.

This paper aims to examine the effect of audit firm governance on audit quality. Audit firm governance is broken down into two categories, namely, board ownership and engagement partner ownership.

Audit firms from Borsa Istanbul and their clients who are quoted there as well were used to test the hypotheses. The final sample covers 1,291 observations at the client level between 2013 and 2019. Ordinary least square was conducted to test the hypotheses. Heckman selection model and instrument variable regression with two-stage least square (IVREG with 2SLS) were also used to control the self-selection and endogeneity problems, respectively. To enhance the validity of the main results, alternative audit quality measures were used.

The empirical findings show that board ownership and engagement partner ownership have an impact on audit quality. The results indicate that engagement partners with high shares enhance audit quality only in Big4 audit firms. The positive effect of higher board ownership on audit quality is more prominent in non-Big4 firms. The Heckman two-stage procedure and IVREG with 2SLS were conducted, both of which were consistent with the main results. The results regarding alternative audit quality measures are in accordance with the main estimation results.

To the best of the author’s knowledge, this is the first study examining the impact of audit firm board ownership on audit quality. In addition, this paper further advances the literature by investigating the effects of ownership at engagement partner levels on audit quality in the context of an emerging market, Turkey.